UK Pension Calculator
Your pension gets three tailwinds most savings don't: tax relief from HMRC, free money from your employer, and decades of compounding. See what they build together.
Your inputs
Pot growth over time
Year-by-year breakdown
| Year | Paid in | Growth | End balance |
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How UK workplace pensions work
Thanks to auto-enrolment, most employees are already in a pension: the legal minimum is 8% of qualifying earnings — at least 3% from your employer and 5% from you. That 5% already includes tax relief, which is where the magic starts. Under "relief at source", every 80p you contribute becomes £1 in your pension because HMRC adds the 20p of basic-rate tax relief automatically. Employer contributions go in gross — no relief needed, it's simply free money on top of your salary.
The math behind this calculator
Your monthly contribution is grossed up: employee % ÷ 0.8, plus the employer %. That total compounds monthly at one-twelfth of the annual return. The calculator assumes 20% basic-rate relief on your contributions; higher-rate (40%) and additional-rate (45%) taxpayers get further relief via self-assessment, which isn't modelled here.
Each month: balance = balance × (1 + r/12) + monthly total
Worked example
Salary £45,000, you pay 5%, employer pays 3%, 6% growth, 30 years. You put in £67,500 from take-home pay; HMRC adds £16,875 in tax relief; your employer adds £40,500. That's £124,875 of contributions — and the pot reaches roughly £348,000. Growth (£223,000) is nearly two-thirds of the final pot, and the tax relief plus employer money mean every £1 you sacrificed became about £5 at retirement.
Caveats worth knowing
- Annual allowance: £60,000. For 2026/27 that's the most that can go into your pensions per year (you + relief + employer) without a tax charge. It tapers from £260,000 of income down to a £10,000 minimum.
- No lifetime limit — but tax-free cash is capped. The Lifetime Allowance was abolished in April 2024. You can usually take 25% of your pot tax-free, up to the Lump Sum Allowance of £268,275.
- You can't touch it until 55 (rising to 57 in April 2028). A pension is genuinely locked away — that's the price of the tax relief.
- Higher-rate taxpayers: you get an extra 20–25% relief to claim via self-assessment, which this calculator doesn't add. Your real outcome is better than shown.
Sources: Wealthify — pension allowance 2026/27; UKTaxDrag — LSA & LSDBA explained; GOV.UK — income tax rates.