Workplace Pension Calculator

This calculator projects the value of your pension pot at retirement from your current contributions, your employer's contributions, investment growth and tax relief. It applies compound growth to monthly contributions, which is why small changes made early move the final figure far more than large ones made late. Adjusting the contribution percentage and watching the projected pot respond is the quickest way to see whether your current rate is going to get you anywhere near the retirement income you have in mind.

UK pension contributions receive tax relief at your marginal rate. Basic-rate taxpayers get 20% relief automatically, so a £100 contribution costs you £80. Higher-rate taxpayers can claim an additional 20% through Self Assessment, which is money a surprising number of people never reclaim. Relief is the reason a pension beats saving the same amount from taxed income, and the reason the effective cost of increasing your contribution is always lower than the number on your payslip suggests.

Auto-enrolment sets a minimum total contribution of 8%, made up of 5% from you and 3% from your employer, on qualifying earnings between £6,240 and £50,270. Many employers offer more generous matching, and taking the full match is the closest thing to free money in the system. The minimum is rarely enough on its own. A common rule of thumb is to halve your age when you start saving and use that as the percentage of pre-tax salary to put away, so 12.5% at 25, 15% at 30 and 20% at 40. The Pensions and Lifetime Savings Association estimates a single person needs £23,300 a year for a moderate retirement and £37,300 for a comfortable one, both well beyond what 8% delivers alone.

Three different mechanisms process UK pension contributions, and they hit your take-home pay differently. Salary sacrifice, used by most workplace schemes, reduces your gross salary before income tax and NI are calculated, saving 28-47% per £100 contributed. Relief at Source, used by most personal pensions and SIPPs, takes contributions from net pay and HMRC adds 25% on top, with higher-rate taxpayers claiming the further 20-25% themselves. Net Pay arrangements deduct contributions before tax but after NI. Check which one your scheme uses, because salary sacrifice typically gives the biggest benefit.

You can contribute up to £60,000 in 2026/27, or 100% of earnings if that is lower, with full tax relief. Above that you pay an Annual Allowance Charge at your marginal rate. High earners face the Tapered Annual Allowance, which cuts the limit by £1 for every £2 of adjusted income over £260,000, down to a floor of £10,000. Carry forward lets you use unused allowance from the previous three tax years, provided you were a member of a registered scheme in those years. Once you flexibly access a defined contribution pension, the Money Purchase Annual Allowance of £10,000 replaces the standard limit for good.

Defined contribution pensions can be accessed from age 55, rising to 57 from 6 April 2028. At that point 25% comes out tax free as the Pension Commencement Lump Sum, and the remaining 75% is drawn as taxable income through an annuity, drawdown or lump sums known as UFPLS. Defined benefit and final salary schemes set their own retirement ages, usually 60 or 65. State Pension age is currently 66, rising to 67 between 2026 and 2028 and to 68 thereafter. Retiring before State Pension age means the pot has to stretch across more years, which is why a withdrawal rate of 3.5-4% a year is the usual guide.

Choosing between a pension and an ISA comes down to when the tax falls. Pensions give relief on the way in and tax 75% of the income on the way out, while ISAs use money that has already been taxed and then pay out nothing further. For higher-rate taxpayers the pension almost always wins, because 40% relief going in is unlikely to be matched by the 20% basic rate most people pay in retirement. For basic-rate taxpayers the gap narrows, though the 25% tax-free lump sum and the employer match still tip it. Lifetime ISAs for under-40s add a 25% government bonus with tax-free withdrawals after age 60, and holding one of each is often the better answer than choosing.