Pension Growth Calculator
✓ Verified for 2026/27Pension Details
years
years
£
£
£
%
Projected Pot
£0
at retirement
Tax-Free Lump Sum
£0
25% allowance
Total Contributions
£0
you & employer
Investment Growth
£0
compounded interest
Pension Pot Breakdown
Projected Pot
£0
Tax-Free Lump Sum (25%)
£0
Remaining Taxable Pot
£0
Your Contributions
£0
Employer Contributions
£0
Total Investment Growth
£0
Pot Growth over Time
UK tax rules allow you to take up to 25% of your total pension fund tax-free once you reach age 55 (rising to 57 in 2028), capped at a lifetime limit of £268,275. The remaining 75% is taxable as ordinary income when withdrawn.
How We Calculated This
- Enter Pension Sacrifice details: Specify salary sacrifice contribution percentage or flat rate.
- Calculate pre-tax deduction: Reduce the gross taxable salary by the contribution amount.
- Compute new lower taxes: Recalculate Income Tax and employee National Insurance on the lower taxable figure.
- Determine Savings: Compare the net pay before and after the contribution to find the true net cost and tax/NI savings.
Real-World Examples
Example 1: 5% Salary Sacrifice on £40,000 Salary
Shows how the tax/NI savings reduce the true cost of saving for retirement.
Gross salary: £40,000 Pension contribution (5%): £2,000 New taxable salary: £38,000 Income Tax savings (20% of £2,000): £400 National Insurance savings (8% of £2,000): £160 Total Tax + NI saved: £560 Net cost to employee: £2,000 - £560 = £1,440
Frequently Asked Questions
What is a salary sacrifice pension arrangement?
Salary sacrifice is an agreement where you agree to lower your gross salary in exchange for your employer making equivalent pension contributions. This saves you both Income Tax and National Insurance.
What is the UK pension contribution tax-free allowance?
The annual allowance is capped at £60,000 per tax year or 100% of your earnings, whichever is lower, unless tapered for high earners.
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About This Calculator
This calculator uses the latest HMRC rates for the 2026/27 tax year. For illustrative purposes only — always consult a qualified tax adviser for formal advice.