UK Pension Calculator 2025/26.

The full new State Pension for 2025/26 is £230.25 per week, which is £11,973 per year. To get the full amount you need 35 qualifying years of National Insurance contributions. With 10-34 years you receive a proportional amount (approximately £342 per year per qualifying year). With fewer than 10 years you typically don't qualify. Check your NI record at gov.uk/check-state-pension.

Basic rate (20%) taxpayers automatically receive 25% added by the pension provider - so a £100 net contribution becomes £125 in the pot. Higher rate (40%) taxpayers can claim an additional 20% via their self-assessment, making the effective relief 40%. Additional rate (45%) taxpayers can claim an extra 25%, making relief 45%. The annual allowance is £60,000 for 2025/26 or 100% of your earnings, whichever is lower.

Yes. Voluntary Class 3 NI contributions cost £17.75 per week (£923 per year) for 2025/26. Each year of voluntary contributions adds approximately £342 per year to your State Pension for life. The payback period is typically under 3 years. You can usually buy back up to 6 years. Worth doing if you have a State Pension forecast shortfall and you're more than 3 years from drawing. We model this as part of Tax Planning Workshop (£395).

Employer pension contributions are usually the most tax-efficient way to extract value from a limited company. The contribution is corporation tax deductible (saves 19-25%), attracts no employer NI or employee NI, and no Income Tax until you draw the pension. Compared to dividends taxed at 33.75% in the higher rate band, employer pension contributions can save you 40-50% of value. The annual allowance is £60,000 - use it before extracting via dividends. Built into our limited company package (£695-£1,655/year).

The Lifetime Allowance (LTA) was abolished from 6 April 2024 and replaced by two new allowances: the Lump Sum Allowance (LSA) of £268,275 caps tax-free lump sum withdrawals across all pensions, and the Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100 caps tax-free lump sums payable on death. For most people there is no longer a cap on the total pension pot value - only on tax-free lump sum amounts.

The Pensions and Lifetime Savings Association's Retirement Living Standards 2025 suggest a single person needs £14,400/year for minimum, £31,300/year for moderate, and £43,100/year for comfortable retirement (outside London - costs are higher in the capital). Using the 4% sustainable withdrawal rule plus the full State Pension of £11,973, you'd need a private pension pot of approximately £61K minimum, £484K moderate, or £778K comfortable. London needs roughly 20-25% more.

Salary sacrifice means giving up gross salary in exchange for an employer pension contribution. Both employee and employer save National Insurance on the sacrificed amount. For a basic rate taxpayer this saves 8% Employee NI plus 15% Employer NI (often shared with employee). Higher rate taxpayers save 2% Employee NI plus 15% Employer NI. Most employers offer this - ask HR. Salary sacrifice does not affect the £60,000 annual allowance because the contribution comes from employer, not employee.

Yes. Self-employed individuals contributing to a personal pension or SIPP receive automatic basic rate tax relief - pay £80, the pension provider claims £20 from HMRC making your contribution £100. Higher rate (40%) and additional rate (45%) taxpayers can claim extra relief through their self-assessment return. Annual allowance is £60,000 or 100% of earnings, whichever is lower. We make sure self-employed clients claim every penny of higher rate relief through their SA filing.

Once you flexibly access your pension (drawdown income, take taxable lump sum), your annual contribution allowance drops permanently from £60,000 to just £10,000 per year. This is the Money Purchase Annual Allowance. It's an anti-recycling rule to stop people taking pension tax-free, then putting it back in to claim tax relief again. If you're still working and contributing, think carefully before triggering MPAA - taking just the tax-free lump sum (without flexible drawdown) does not trigger it.

We help in three ways within our chartered accountancy scope. For self-employed clients we calculate optimal pension contribution levels and claim higher rate relief through self-assessment (typically captures £2K-£5K of missed relief). For limited company directors we structure employer pension contributions instead of dividends to save 30-50% in combined tax - incorporated into our annual accounts engagement. For employees we model salary sacrifice impact and advise on contribution levels. Our Tax Planning Workshop is £395 one-off. We are not FCA-authorised so we do not recommend specific pension products or providers - for that, speak to a regulated IFA.