UK Pension Calculator 2024-25

What are the auto-enrolment pension contribution minimums in 2024/25?

Under auto-enrolment rules, the minimum total pension contribution is 8% of qualifying earnings, split between employee and employer. The minimum employee contribution is 5% (including any tax relief), and the minimum employer contribution is 3%. Qualifying earnings are the portion of your salary between £6,240 and £50,270 per year. For example, if you earn £30,000, qualifying earnings are £23,760 (£30,000 minus £6,240). Your minimum employee contribution would be 5% of £23,760 = £1,188/year. Many employers offer enhanced contributions above the minimum — always check your employer's scheme to see if matching extra contributions are available.

How does pension tax relief work in the UK?

Pension tax relief means the government tops up your pension contributions at your marginal income tax rate. For basic rate taxpayers (20%), for every £80 you contribute to a personal pension (SIPP or stakeholder pension), HMRC adds £20 — so £100 goes into your pension at a net cost to you of £80. This is called "relief at source." Higher rate taxpayers can claim an additional 20% relief through Self Assessment, and additional rate (45%) taxpayers claim 25% extra. Workplace pensions often use "net pay arrangement" instead, where contributions are deducted from gross pay before income tax is calculated — in this case you automatically receive full marginal rate relief without a Self Assessment claim.

What is the annual allowance for pension contributions?

The annual allowance is the maximum amount that can be contributed to your pensions in a tax year while still receiving tax relief. In 2024/25 it is £60,000 (or 100% of your earnings if lower). This includes both your contributions and your employer's contributions. High earners with adjusted income above £260,000 face a "tapered annual allowance" that reduces to a minimum of £10,000. If you have accessed pension savings flexibly (for example taken flexible drawdown), the Money Purchase Annual Allowance (MPAA) of £10,000 applies instead. Unused allowance from the previous three tax years can be "carried forward" to allow larger contributions in the current year.

When can I access my UK pension?

The minimum pension access age in the UK is currently 55, rising to 57 in 2028. From that age you can take up to 25% of your pension pot as a tax-free lump sum (subject to a Lump Sum Allowance of £268,275 across all registered pensions). The remaining balance can be taken as an annuity (guaranteed income for life), moved into drawdown (flexible withdrawals), or a combination. Withdrawals from pension above the tax-free element are taxed as income. The State Pension is payable from age 66 (rising to 67 by 2028 and 68 in future decades). Most people can also continue working while drawing their pension, giving flexibility in how and when they retire.