Useful next calculations
Rates and sources, 2026/27
Usually 25% of a crystallised amount is tax-free, limited by the remaining lump sum allowance (standard £268,275).
| Band or figure | Rate |
|---|---|
| Usual tax-free proportion | 25% |
| Standard lump sum allowance | £268,275 |
Source: GOV.UK — pension lump sum allowance. Source checked for 2026/27.
When to use this calculator
- Before choosing between saving, investing or changing a contribution.
- When you want to compare cautious, base and optimistic return assumptions.
- When you need a projection before making a longer-term decision.
- When you want to see whether starting earlier or contributing more changes the outcome more.
A worked example
These are the example figures the calculator opens with.
| Input | Value |
|---|---|
| Amount crystallised (£) | £200,000 |
| Remaining lump sum allowance (£) | £268,275 |
| Tax rate on taxable lump sum (%) | 20% |
For those figures the calculator returns:
- Tax-free: £50,000.00
- Taxable: £150,000.00
- Tax: £30,000.00
- Net lump sum: £170,000.00
How to read your results
Tax-free
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Taxable
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Method & assumptions
When you crystallise defined-contribution pension rights, up to 25% is usually tax-free, capped by your remaining lump sum allowance. The standard LSA is £268,275 unless you have a protected higher amount. The rest of the crystallised amount is taxable income at the rate you enter.
This does not model MPAA, lump sum and death benefit allowance, scheme-specific protections, or PAYE emergency tax on a first payment. Confirm remaining allowances with your scheme. Source: GOV.UK tax on your private pension — lump sum allowance.
Common mistakes
- Assuming a constant return without checking a more conservative growth rate.
- Forgetting ongoing contributions, fees or tax wrappers where relevant.
- Focusing only on the final balance instead of the path required to reach it.
- Ignoring the drag of charges over a long period.
What to do next
- Test a cautious, expected and optimistic growth rate.
- Compare this result with related savings or retirement tools before committing more money.
- Consider charges and any tax wrapper that applies.
- If the projected balance falls short, increase the contribution until the result meets your goal.