UK Pension Calculator 2026/27

The annual allowance is £60,000, or 100% of your earnings if lower. The Lifetime Allowance was abolished from April 2024, so there is no cap on your total pension pot. Tax relief is given at your marginal income tax rate: 20% for basic rate, 40% for higher rate, and 45% for additional rate taxpayers.

Auto-enrolment is a UK government scheme requiring employers to automatically enrol eligible workers into a qualifying workplace pension scheme. The minimum contributions are 3% from the employer and 5% from the employee (8% total) on qualifying earnings between £6,240 and £50,270 per year.

The full new State Pension for 2026/27 is approximately £221.20 per week, or £11,502 per year. You need 35 qualifying years of National Insurance contributions to receive the full amount. Each qualifying year adds roughly one thirty-fifth of the full pension. You can check your forecast on GOV.UK.

The normal minimum pension age is currently 55, but this will rise to 57 from April 2028 for most people (unless you have a protected pension age of 55). When you access your pension, you can take a 25% tax-free lump sum (Pension Commencement Lump Sum), with the remaining 75% taxed as income at your marginal rate.

Exceeding the £60,000 annual allowance triggers an Annual Allowance Charge. This charge is added to your other income for the year and taxed at your marginal rate, meaning higher and additional rate taxpayers face larger charges. You can carry forward up to 3 years of unused annual allowance to offset this.

Salary sacrifice is a tax-efficient arrangement where you agree with your employer to give up part of your gross salary in exchange for higher employer pension contributions. This reduces your income tax and National Insurance liability, and the employer's NI saving is often passed to you as an additional pension contribution.