Pension Withdrawal Tax Calculator
Emergency Tax, UFPLS & P55 Refund
Taking money from your pension? See how much emergency tax the provider will deduct, what you really owe for 2026-27, and which form gets the difference back.
Read the full answer — method, rates and figures
Quick answer: The first time you take money from a pension pot, the provider usually has no tax code for you, so HMRC's rules make it use the emergency code 1257L on a "month 1" basis: one payment is taxed as if you received it every month of the year. On a £40,000 lump sum (25% tax-free) with £20,000 of other income, £25,810 of the £30,000 taxable part lands in the 40% and 45% bands, so about £11,879 is deducted against £6,000 actually owed, so £5,879 is overpaid.
You can reclaim it in the same tax year: form P55 if money is left in the pot, P53Z if you emptied it and are working or claiming benefits, P50Z if you emptied it and have no income other than the State Pension. Otherwise HMRC corrects it after 5 April. 2026-27 rates for England, Wales and Northern Ireland.
Sources: HMRC PAYE Manual PAYE76170, Self Assessment Manual SAM110270, gov.uk P55 guidance, read 29 September 2026.
How much tax will I pay on a pension withdrawal?
At first, usually too much. On a £40,000 UFPLS with £20,000 of other income, £10,000 is tax-free and the emergency code takes £11,879 from the other £30,000, so you receive £28,121. The real tax for the year is £6,000: form P55 gets the £5,879 back.
Emergency tax taken
£11,879
Tax you really owe
£6,000
Refund due
£5,879
Form
P55
£10,000 tax-free, £30,000 taxable. The provider deducts £11,879 on the emergency code, so £28,121 reaches your bank.
On top of £20,000 of other income the real tax is £6,000, so £5,879 is overpaid. Claim it with form P55 (only if you will not take more payments before 5 April; otherwise HMRC refunds it after the tax year).
Last reviewed 29 September 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
This is the textbook answer. Want to see this calculated against your actual accounts?
Connect them to Richify →Taking Money Out? See What's Left
Richify keeps your pensions, ISAs, property and investments in one net-worth view, so you can see what a withdrawal does to the whole picture. Free, no ads.
Try Richify freeHow it works
Emergency deduction: the taxable part of the payment, less one twelfth of the 1257L allowance, taxed at 20%, 40% and 45% on one twelfth of each annual band (the month 1 basis). True tax: the extra income tax the taxable part adds on top of your other income for the whole 2026-27 tax year, including the personal allowance taper above £100,000.
Assumes England, Wales or Northern Ireland rates, a first payment with no current-year P45, and no other flexible payments this tax year. Scottish rates, the Money Purchase Annual Allowance and benefits are not modelled.
How much emergency tax on a pension lump sum?
| UFPLS | Emergency tax | True tax | Refund |
|---|---|---|---|
| £5,000 | £540 | £750 | −£210 |
| £10,000 | £1,952 | £1,500 | £452 |
| £20,000 | £5,129 | £3,000 | £2,129 |
| £40,000 | £11,879 | £6,000 | £5,879 |
| £60,000 | £18,629 | £11,946 | £6,683 |
| £100,000 | £32,129 | £23,946 | £8,183 |
Each row: a first UFPLS (25% tax-free) with £20,000 of other income, 2026-27. A negative refund means the emergency code took too little: on £5,000 it deducts £540 against £750 owed, because your salary has already used the allowance the code gives the payment.
Avoiding the emergency tax
You cannot stop the month 1 code on a first payment, but you can make it smaller. A small first withdrawal lets HMRC send your provider a proper code before the large one. If you left a job in this tax year, giving the provider your P45 means it uses that code instead of 1257L (still on a month 1 basis). And a pot worth up to £10,000 can usually be taken whole as a small pot lump sum (25% tax-free), which has its own refund form, P53, rather than P55.
See what your pots add up to with the UK pension calculator, check how much tax-free cash you have left with the lump sum allowance calculator, and see what happens to unused pensions from April 2027 with the pension inheritance tax calculator.
Last updated: 29 September 2026, 2026-27 tax year.
Primary sources: HMRC PAYE Manual PAYE76170, flexibly accessed pension payments; HMRC Self Assessment Manual SAM110270, in-year repayments; GOV.UK Claim back tax on a flexibly accessed pension overpayment (P55); GOV.UK Tax on your private pension; Finance Act 2026 rates and allowances.
How to use this calculator
- Enter the gross amount the pension will pay out.
- Choose UFPLS (25% of each payment tax-free) or a drawdown payment (fully taxable).
- Enter your other taxable income for this tax year: salary, State Pension, other pensions.
- Say whether you are emptying the pot, and whether you work or claim benefits.
- Read the emergency tax taken, the tax you really owe, the refund, and which form to use.
❓ Frequently Asked Questions
Why was my pension withdrawal emergency taxed?
Because it was the first flexible payment and your provider had no current tax code for you. HMRC's PAYE Manual says the scheme must then use the emergency code on a month 1 basis for that payment (or the code on a P45 from this tax year, still month 1), and HMRC sends a proper code for any later payments.
Month 1 gives you only one twelfth of the personal allowance and of each tax band, so a single £40,000 payment is taxed as if it were a monthly salary of that size.
How do I get emergency tax back from a pension withdrawal?
Claim it in the same tax year with the right form, online or on paper: P55 if you took part of the pot and will not take regular or flexible payments before 5 April; P53Z if you emptied the pot and have other income such as a job or benefits; P50Z if you emptied the pot, have stopped work and have no income other than the State Pension. If you take more payments later in the year, or do nothing, HMRC reconciles it after the tax year ends, and any refund comes then.
What is the difference between P55, P53Z and P50Z?
All three reclaim tax overpaid on a flexibly accessed pension payment. P55: the pot still has money in it (with or without other income).
P53Z: the pot is empty and you have other income. P50Z: the pot is empty and you have stopped working with no other income apart from the State Pension.
Non-UK residents use form R43 instead. Source: HMRC Self Assessment Manual SAM110270.
Is 25% of a UFPLS tax-free?
Yes. An uncrystallised funds pension lump sum (UFPLS) is paid 25% tax-free and 75% taxable as income, every time you take one, within the £268,275 lump sum allowance.
Drawdown is different: you usually take the tax-free cash when you move money into drawdown, and every later payment is fully taxable. The emergency code applies only to the taxable part.
Can emergency tax on a pension be too little?
Yes, when you already have a lot of other income. The month 1 code gives the payment its own share of the personal allowance and basic-rate band, which your salary has already used.
Take £10,000 as a UFPLS on a £60,000 salary and the emergency deduction falls short of what you owe, so HMRC collects the rest after the tax year, usually through your tax code or a bill. The calculator shows this as tax still to pay.
Should I take my pension lump sum before the Budget on 28 October 2026?
Nothing about tax-free cash has been announced; anything said before 28 October is speculation. If you do take money now, know that the emergency deduction is not the final tax: about £5,879 of the £11,879 taken from the £40,000 example comes back.
Taking a large sum in one tax year can also cost you tax that spreading it over two would not, because it can push you into the 40% band, so compare the true tax as well as the deduction.
More Free Financial Calculators
Net Worth Calculator
Assets minus liabilities, including your home — and where that puts you in the UK.
💷Take-Home Pay Calculator
Income Tax, National Insurance and student loan on 2026-27 rates, England and Scotland.
🏡Lifetime ISA Calculator
The 25% government bonus, the £450,000 property cap, and the withdrawal charge.
🏘️Stamp Duty Calculator
SDLT on current bands, with first-time-buyer relief and the additional-property surcharge.
🗓️Making Tax Digital Checker
Are you in scope? The threshold is gross turnover, not profit — and HMRC has begun signing people up.
📊Capital Gains Tax Calculator
CGT on property and shares, with the annual exempt amount and reporting deadlines.
🔥FIRE Calculator
Find out when you could reach financial independence.
Further Reading
Taking Money Out? See What's Left
Richify keeps your pensions, ISAs, property and investments in one net-worth view, so you can see what a withdrawal does to the whole picture. Free, no ads.
Try Richify free
See what your pensions add up to after taxTrack my pensions
Free in the Richify app