/

UK Pension Tax-Free Lump Sum Calculator

Since April 2024, tax-free cash is capped by the Lump Sum Allowance (£268,275) rather than the old Lifetime Allowance.

Instant results Private — runs in your browser Updated January 1970

Inputs

Pension pot

Tax-free lump sum

$100,000.00

Remaining taxable pot: £300000

Tax-free lump sum = min(25% of pot, Lump Sum Allowance £268,275). The remainder is taxed at your marginal Income Tax rate on withdrawal.

Is this guaranteed?

No — these are projections that assume your inputs hold. Real markets and life are variable.

What's the 4% safe-withdrawal rule?

The Trinity Study suggests withdrawing 4% of a balanced portfolio in year one and adjusting for inflation typically lasts 30+ years.

Should I max out my 401(k)?

At minimum, capture the full employer match — that's free money. Beyond that, balance against debt payoff and emergency reserves.

Roth vs. Traditional?

Roth wins if you'll be in a higher tax bracket in retirement; Traditional wins if you'll be in a lower bracket.

When should I start saving?

Immediately. The single biggest variable in retirement success is years of compounding.

Results are estimates for educational purposes only and are not financial advice. Verify with a qualified professional before making decisions.

Last updated January 1970