Personal allowance
The amount of income you can earn each year before paying income tax — £12,570 for 2025/26. Tapered away for incomes above £100,000.
The personal allowance is effectively a 0% tax band. Everyone gets it unless their income exceeds £100,000, at which point it's reduced by £1 for every £2 of income above the threshold. It's fully gone at £125,140, creating an effective 60% marginal tax rate in the £100,000-£125,140 band.
Pension contributions reduce your adjusted net income, which can restore lost personal allowance. This makes pension contributions between £100,000 and £125,140 of income extraordinarily tax-efficient — every £1 contributed effectively saves 60p in tax and NI.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.