National statistics

Background and methodology

Updated 27 September 2023

1. About these statistics

This publication is the annual update of HMRC’s Private pension statistics. This includes information from Tables 2, 6, 7, 8 and 9, providing detailed statistics on the most recent data on personal pensions, annual allowance breaches, lifetime allowance breaches, taxable flexible pension payments and the estimated cost of pension Income Tax and National Insurance contribution relief.

2. Recent changes

2.1 Discontinued tables

From September 2023 the following tables have been discontinued in response to a consultation on HMRC statistical publications.

• Table 1 – Reported personal pension scheme annual contributions and retirement annuity contracts (RACs)

• Table 2.1 – Reported number of members by scheme type

• Table 2.2 – Report individual contributions by scheme type

2.2 Changes to Table 2

From September 2023 Table 2 will include the following information for tax years 2013 to 2014 onwards.

• value of individual contributions to personal pensions

• value of individual contributions to personal pensions made by self-employed individuals

• number of members contributing to personal pensions

• number of individuals contributing to personal pensions who are self-employed

From September 2023 the following information has been removed from Table 2 in response to a consultation on HMRC statistical publications.

• value of individual contributions to personal pensions disaggregated by stakeholder, non-stakeholder, employer, and non-employer sponsored schemes

• number of members contributing to personal pensions disaggregated by stakeholder, non-stakeholder, employer, and non-employer sponsored schemes

2.3 Changes to Table 6

For the September 2023 release of these statistics, some of the figures on the estimated cost of pensions relief in Table 6 for tax year 2021 to 2022 are estimated using projected rather than outturn data. This is due to delays in the ONS’s data validation process of the pensions data within the Annual Survey of Hours and Earnings (ASHE) 2021 to 2022. ASHE 2020 to 2021 data has been projected to 2021 to 2022 for the purpose of these estimates. More information can be found in the Table 6 section of the methodology below.

2.4 Changes to Table 9

From September 2023, Table 9 on taxable flexible payments from pensions follows an improved methodology. Figures provided on taxable flexible payments from pensions in this statistics publication release are not comparable to those published previously due to these changes. Figures for previous years have been revised when applicable. These improvements include a stricter definition of payments identified as flexibly accessed pension payments and more information can be found in the Table 9 section of the methodology below.

3. Background on Pension Policy and their tax treatment

3.1 Pensions overview

In general, a pension is an arrangement to provide an individual with a regular income when they retire. There are 2 main types of pensions:

• state pensions

• private pensions

There are 2 main types of private pensions:

• occupational pensions

• personal pensions

3.2 State pensions

The State Pension is a regular payment paid by the state that people can receive when they reach State Pension age, currently set at 66. These payments are not considered as part of any of the tables included in this publication.

3.3 Private pensions

Occupational pensions and personal pensions are both private pensions. Private pensions can be funded by both individuals and their employers, and for most individuals, can only be accessed when they reach the Normal Minimum Pension Age (NMPA), currently set at 55.

As of October 2018, all UK employees who earn at least £10,000 a year with one employer and are between age 22 and the state pension age will be automatically enrolled into a private pension by their employer. Individuals can choose to opt out, but when opted in, at least 8% of the employees’ qualifying earnings will be contributed annually, with at least 3% coming from the employer.

Private pensions can either be defined contribution (DC) or defined benefit (DB). A DC pension is where either the employee, employer or both contribute, and then use the accumulated funds to provide an income at retirement – these can also be administered under master trust arrangements. A DB pension is where an employer agrees to pay the individual a certain pension income at retirement, usually based on the number of years they have worked for the employer and their average or final income during their period of employment.

Private pensions can either be funded or unfunded. Funded pensions are those where contributions and investment returns build up over time to fund the pension when it is withdrawn. Funded pensions can be DB or DC pensions. For a funded DB pension, the fund may be worth more or less than the pension income promised at retirement. Unfunded pensions do not rely on contributions and investment returns building over time and can only be DB pensions. The DB pension promise is underpinned by the scheme instead of an invested fund.

3.4 Occupational pensions

Occupational pension schemes are arrangements established by employers to provide pensions to their employees. In the public sector, occupational pensions are typically those which are provided by the employer (central or local government). In the private sector, occupational pensions are typically employer-sponsored schemes with scheme trustees that are set up under trust law by one or more employers for the benefit of their employees. Occupational pensions can either be DC or DB schemes.

3.5 Personal pensions

Personal pensions are defined contribution arrangements between an individual and a pension provider, usually a financial organisation such as building society, bank, or insurance company into which an employer might also contribute. Personal pensions can be subdivided into 2 main types. Either those arranged directly between the individual and provider, or in many cases established by an employer as a way of providing its employees’ access to a pension plan run by a pension provider. These are often referred to as group personal pensions (GPP) or employer sponsored pensions, but may not be arrangements exclusive to that employer, and might be available for sale to the general public. Although they are sometimes referred to as company pensions, they are not run by employers (or scheme trustees) and should not be confused with occupational pensions. The employer will also normally contribute to the GPP.

3.6 Types of private pension provision

Chart 1 below summarises the different types of private pension.

Chart 1: Types of private pension provision

Chart 1 depicts how types of private pension schemes are organised. It shows that defined contribution pension schemes can be both occupational and personal schemes, whereas defined benefit pension schemes are all occupational schemes. It also shows that funded schemes can be both occupational and personal schemes, whereas unfunded schemes are all occupational.

Source: Adapted from ‘Pensions: Challenges and Choices, the First Report of the Pensions Commission’, Pensions Commission, October 2004. Not to scale – figure does not represent the number of memberships of these various types of private pensions.

3.7 The taxation of registered pension schemes

The taxation of pensions

The tax treatment of pensions can be described in relation to the way in which:

• the contributions are taxed

• the investment returns are taxed

• the pension benefits are taxed

A regime described as exempt, exempt, taxed (EET) would mean that the contributions paid into a pension are exempt from tax (E); the investment gains are exempt from tax (E) and the withdrawals are taxed (T). Alternatively, TTE would mean that the contributions paid into a pension are taxed; as are the investment returns; but the withdrawals are exempt from taxation. The tax treatment depends on whether the pension scheme is registered with HMRC or not.

Tax on contributions

Income Tax relief is available on individual and employer contributions to registered pension schemes up to an annual allowance (see below). Relief is available on individual contributions worth up to 100% of individuals’ earned income or £3,600 (inclusive of relief), whichever is greater.

The Income Tax relief on individual contributions can be administered in 3 alternative ways:

1. Net Pay Arrangement (NPA) – Individual pension contributions are taken from your salary gross of tax, and Income Tax is then only charged on the remainder of your salary.

2. Relief at Source (RAS) – Individual pension contributions are made from your net of tax income. A basic rate of Income Tax relief is claimed by the pension scheme on your behalf. For those due tax relief above the basic rate of Income Tax, this is claimed through Self Assessment tax returns or by contacting HMRC.

3. Salary Sacrifice – This is an agreement with your employer whereby they reduce your gross of tax salary and make these pension contributions on your behalf. The remainder of your salary that has not been sacrificed is then subject to Income Tax and National Insurance Contributions (NICs). This results in Income Tax relief, Class 1 Primary NICs relief and Class 1 Secondary NICs relief on salary sacrificed contributions.

NICs on contributions

NICs relief is available on employer contributions to registered pension schemes. Relief on employer contributions is provided to both employees through Class 1 Primary NICs relief and to employers through Class 1 Secondary NICs relief.

Individual and employee contributions are subject to NICs. Employee contributions are subject to Class 1 Secondary NICs (paid by employers). As described above, contributions are exempt from NICs when the contributions are sacrificed via salary sacrifice and so made by the employer on the employee’s behalf.

Contributions in excess of the annual allowance (AA)

As individuals get Income Tax relief on all their pension contributions, they are subject to a tax charge on any pension savings in excess of an annual allowance plus any unused allowance from the previous 3 years, this is called carry forward. The annual allowance for the tax year 2021 to 2022 is £40,000.

Some individuals will be subject to a lower annual allowance. The tapered annual allowance was introduced in 2016 and applied to individuals with adjusted income over £150,000 until the threshold was raised to £240,000 in 2020 to 2021. The adjusted income limit for the tax year 2021 to 2022 is £240,000.

The money purchase annual allowance is triggered when an individual withdraws from a DC pension pot and applies to each tax year after withdrawal, in place of the standard AA. The money purchase annual allowance for the tax year 2021 to 2022 is £4,000.

3.8 Tax on investment returns

All investment returns in registered pension schemes are exempt from taxation.

3.9 Tax on withdrawals

The way in which the withdrawals of pension savings in registered schemes are taxed depends on an individual’s circumstances. In particular, the size of their pension fund.

Individuals with total pension savings of less than £30,000 are allowed to withdraw the entire amount out as a lump sum. If the right to the pension has not yet arisen (the pension is not in payment or hasn’t been voluntarily deferred by the pensioner), the first 25% of these amounts are tax free. All other payments are taxed as pension income at the individual’s marginal rate and exempt from NICS. These are known as the trivial commutation rules.

Individuals with funds above £30,000 but below the lifetime allowance (LTA), £1,073,100 in 2021 to 2022, can also withdraw up to 25% of their pension savings tax-free after reaching the NMPA, currently set at age 55. Some pension pots may be subject to scheme specific rules where a different age is dictated.

Individuals with pension funds that include one or more funds in occupational schemes of value less than £10,000 are allowed to take the entire amounts in these schemes out as a lump sum no matter how large their total pension savings. In addition, funds of £10,000 or less held in personal pension arrangements can be paid out as lump sum payment to individuals aged at or above the NMPA (currently age 55), as an authorised payment, provided certain conditions are met. An individual may only have 3 such lump sum payments in their lifetime. Lump sum payments made under these rules are taxed as if they were subject to the trivial commutation rules – see above.

Funds above the LTA are subject to different tax rates, depending on how the funds are withdrawn. In 2021 to 2022 any funds above the LTA that are withdrawn as a lump sum are taxed at 55%; and any funds that are used to provide a pension are taxed at 25% (the pension income is then taxed at the individual’s marginal tax rate).

Not all individuals with funds above the LTA will be subject to a LTA charge, this is because individuals can apply for protections.

For pension income taken on or after 6 April 2023, the LTA charge has been effectively abolished, before being formally abolished from 6 April 2024. In 2023 to 2024, the LTA charge rate is set at 0%. The LTA charge still applied in the latest tax year of this publication, 2021 to 2022.

3.10 Freedom and choice in pensions

Since April 2015, individuals aged at or above the NMPA (currently age 55) can access their defined contribution pension savings as they wish, subject to their marginal rate of Income Tax.

Individuals who flexibly access their pension can be subject to alternative annual allowances, explained in more detail below.

3.11 Annual allowance and lifetime allowance

Since 2016 there has been a taper to the annual allowance for those with annual incomes, excluding their individual and employer’s pension contributions, over the threshold income limit. In 2021 to 2022 the threshold income limit is £200,000. For every £2 of adjusted income (income including all individual and employer contributions) over £240,000, an individual’s annual allowance is reduced by £1 down to a minimum of £4,000. From April 2023, the AA, adjusted income and minimum AA have increased. More information on current and historic levels of the standard LTA, AA and other pension thresholds is available on gov.uk.

The money purchase annual allowance (MPAA) is triggered when an individual flexibly withdraws from a DC pension pot and applies to DC contributions in each tax year after withdrawal, in place of the standard AA. The money purchase annual allowance for the tax year 2021 to 2022 is £4,000. DB savings of those that have triggered the MPAA are subject to the alternative AA, which is equal to the standard (or tapered) AA of the individual minus the MPAA.

Where an individual has exceeded either their annual allowance or the lifetime allowance, they must report this by filling a Self Assessment tax return – form SA101. Pension providers will normally deduct any lifetime allowance tax charge from an individual’s pension benefits where there is a benefit crystallisation event (BCE).

Since 2011 to 2012, where an individual’s annual allowance charge exceeds £2,000, they may ask their pension provider to pay this on their behalf and reduce their pension benefits by a corresponding amount. Prior to this, all annual allowance charges had to be paid via Self Assessment. HMRC does not hold details of the type of annual allowance that’s been breached (such as the standard annual allowance, tapered annual allowance or money purchase annual allowance).

Where a pension provider pays an annual allowance tax charge on an individual’s behalf or deducts the amount of a lifetime allowance charge from the individual’s benefits, this is reported to HMRC via the Accounting for Tax Return (AFT).

4. Data sources

4.1 HMRC data

The published Pension tables draw on information from the following returns that pension providers, individuals and employers submit to HMRC.

APSS106 - Registered Pension Schemes Relief at Source Annual claim return: this form provides number of members making contributions and individual contributions for each registered relief at source pension scheme provider.

APSS107 - Registered Pension Schemes Annual statistical return: this form provided number of members and individual contributions by employer and non-employer sponsored schemes for each registered pension provider. Providers are no longer required to complete this return.

RPSCOM100(Z) - Annual Return of Information; this return provides HMRC with details of personal pension accounts in electronic format providing details on individual contributions made in the tax year. Personal details of each account holder are also provided.

SA101 is a supplementary page to the main SA100 Self Assessment Tax return. This provides HMRC with details of individuals exceeding their annual allowance.

Accounting for Tax Return is used by scheme administrators of registered pension schemes to report and pay tax charges relating to the annual allowance and lifetime allowance.

Real Time Information (RTI) is how HMRC receives information about tax and other deductions under the PAYE system submitted by the employer or pension scheme every time an individual is paid. This provides information on employees pay, individual contributions to occupational pensions and payments from pension schemes to individuals.

Survey of Personal Incomes (SPI) is based on information held by HMRC on individuals who could be liable to UK Income Tax. It is carried out annually by HMRC and covers income assessable to tax for each tax year.

4.2 Office for National Statistics surveys

In addition, this publication uses the following data sources provided by the Office for National Statistics (ONS).

ASHE - The Annual Survey of Hours and Earnings is produced annually by the ONS and provides information on the pay, individual contributions, and employer contributions of employees with occupational pensions.

FSPS - The Financial Survey of Pension Schemes is a quarterly survey produced by the ONS that gathers information about income and expenditure, transactions, assets and liabilities of UK-funded occupational pension schemes.

WAS - The Wealth and Assets Survey is a biennial survey produced by the ONS that provides information on pension wealth.

5. Table methodology

5.1 Table 2

Figures for Table 2 are aggregated totals from the relevant forms (APSS106, SA101).

The estimates provided in Table 2 from 2019 to 2020 onwards are not directly comparable to those for 2018 to 2019 and prior tax years due to improvements in the methodology and data source changes.

For 2019 to 2020 and later tax years, totals for individual contributions to, and number of members of, personal pension schemes are produced using APSS106 returns. For prior tax years, APSS107 was used.

For 2019 to 2020 and later tax years, figures for self-employed individuals have been produced using SA101 returns. For the purpose of this table an individual in Self Assessment is identified as self-employed if they file Self Assessment returns as a sole trader, partner or Lloyd’s of London trader. For prior tax years RPSCOM100(Z) was used to identify self-employed members and their contributions.

The 2 largest identifiable master trust schemes which use the relief at source method are removed from the administrative returns for statistical purposes – so that Table 2 approximates personal pensions only. The tax relief received by providers of personal pensions is treated in these statistics as representing contributions by individuals and their contributions have been adjusted to reflect this in Table 2.

5.2 Table 6

Some of the figures on the estimated cost of pension Income Tax and NICs relief in Table 6, 6.1 and 6.2 for tax year 2021 to 2022 are estimated using projected rather than outturn data. All figures using the Annual Survey of Hours and Earnings (ASHE) data, as described below, are projected. This is due to delays in the ONS’s data validation process of the pensions data within the Annual Survey of Hours and Earnings ASHE 2021 to 2022. ASHE 2020 to 2021 data on employee and employer pension contributions have been projected to 2021 to 2022 using the average wage growth seen in the ASHE pay data over this period, for the purpose of these estimates.

This table compares the pension’s tax regime for registered pension schemes (generally EET (exempt exempt taxed)) with an alternative tax regime: TTE (taxed taxed exempt).

Total pension Income Tax relief is calculated as:

• the estimated Income Tax relief on employees’ net pay arrangement contributions

• plus, the estimated Income Tax relief on employers’ net pay arrangement contributions, including Deficit Reduction Contributions

• plus, the estimated Income Tax relief on employees’ relief at source contributions

• plus, the estimated Income Tax relief on relief at source contributions by self-employed individuals

• plus, the estimated Income Tax relief on employers’ relief at source contributions

• plus, the estimated Income Tax relief on employees’ salary sacrificed contributions

• plus, the estimated Income Tax relief on pension funds’ investment returns income

This publication compares the pension’s NICs regime for employer contributions and employee salary sacrificed contributions to registered pension schemes (EEE for Class 1 Primary and Secondary NICs) with the NICs regime we have for earned income and for employee pension contributions (NEE).

Total pension NICs relief is calculated as:

• the estimated Class 1 Primary NICs relief on employers’ contributions including Deficit reduction contributions (DRCs)

• plus, the estimated Class 1 Secondary NICs relief on employers’ contributions including DRCs

• plus, the estimated Class 1 Primary NICs relief on employee’s salary sacrificed contributions

• plus, the estimated Class 1 Secondary NICs relief on employee’s salary sacrificed contributions

Total pension Income Tax and NICs relief (gross of tax charges) is calculated by summing total pension Income Tax relief and total pension National Insurance Contributions (NICs) relief.

The Income Tax relief on pensions is capped by the annual allowance (AA) and the lifetime allowance (LTA), and pensions in payment is subject to Income Tax, which generates Exchequer revenue which partially offsetting the cost of Income Tax and NICs relief on contributions.

Total pension tax and charges are calculated as:

• Income Tax on payments from pension schemes

• plus, AA charges on pension contributions

• plus, LTA charges on pension wealth

Total pension Income Tax relief and total pension NICs relief less the total pension tax charges give total net pension Income Tax and NICs relief.

The estimates are calculated using the following methodologies (corresponding to the bullet points above).

Total pension Income Tax relief

• employees’ net pay arrangement contributions are identified using RTI data, matched to the SPI to identify total income, and Income Tax rates are applied

• employers’ net pay arrangement contributions and total pay are identified in ASHE, and Income Tax rates are applied. DRCs are identified using the FSPS, and an average Income Tax rate is applied

• employees’ relief at source basic rate relief claimed are identified using APSS106, and relief claimed above the basic rate is estimated using Self Assessment

• self-employed relief at source contributions and total income are identified using Self Assessment, and Income Tax rates are applied

• employers’ relief at source contributions are identified in APSS107 and projected in line with the trend identified in ASHE. The Average rate of relief is modelled using ASHE data

• employees’ salary sacrificed contributions and total pay are identified using ASHE, and assuming all individual contributions of those who use salary sacrifice are all salary sacrificed, Income Tax rates are applied

• pension funds’ investment returns income is estimated using FSPS funded occupational pension schemes investment income and scaled using data on pension wealth from WAS, and the basic rate of Income Tax is applied

Total pension NICs relief

• employers’ contributions to net pay arrangement and occupational relief at source schemes and individuals’ total pay are identified in ASHE, and Class 1 Primary NICs rates are applied. Employer contributions to personal relief at source schemes is estimated using a comparison between relief at source contributions from ASHE and the APSS107, and an average Class 1 Primary NICs rate is applied. DRCs are identified using the FSPS, and an average Class 1 Primary NICs rate is applied

• employers’ contributions to net pay arrangement, occupational relief at source and personal relief at source schemes, DRCs and individuals’ total pay are identified in the same way as above, and Class 1 Secondary NICs rates are applied

• employees’ salary sacrificed contributions and total pay are identified using ASHE, and assuming all individual contributions of those who use salary sacrifice are all salary sacrificed, and Class 1 Primary NICs rates are applied

• employees’ salary sacrificed contributions and total pay are identified in the same way as above, and Class 1 Secondary NICs rates are applied

Total pension tax and charges

• Income Tax on pension payments is identified using RTI data, which reports tax paid on pension payments made via PAYE

• AA breaches are reported via Self Assessment and total income net of contributions is used to model the marginal Income Tax rates applied

• LTA charges are reported by schemes via AFT returns

Total incomes are used to model where relievable pension contributions would ‘sit’ in the Income Tax stack if they were taxable and/or NICable. Where estimates are calculated using ASHE data total pay is used as total income isn’t available from ASHE.

Where possible Scottish taxpayers are identified so the correct devolved rates of relief can be applied. Contributions may ‘straddle’ tax bands and therefore not all be relievable at the same rate – this is modelled in Table 6 where total income or pay are available at an individual or employee level. Where total income or pay is not available on an individual or employee level, such as for DRCs, an estimated average marginal tax rate for a comparable group is used.

Table 6 only considers the relief from Income Tax and National Insurance Contributions on pensions. No consideration of the impact on corporation tax is made.

The estimates provided in Table 6 are not comparable to those published for 2018 to 2019 and prior tax years due to improvements in the methodology and data source changes.

5.3 Table 6.1 and 6.2

Individual contributions to net pay arrangements are categorised by sector using the SPI, and scheme type is estimated using ASHE.

Individual contributions to relief at source schemes are categorised by sector using ASHE and all relief at source schemes are assumed to be defined contribution schemes.

Individual contributions made via salary sacrifice are categorised by sector and scheme type using ASHE. Employer contributions to net pay arrangements are categorised by sector and scheme type using ASHE. DRCs are all categorised as private defined benefit schemes.

Employer contributions to occupational relief at source schemes are categorised by sector using ASHE and employer contributions to personal relief at source schemes are all categorised as private defined contribution schemes.

Rates of relief for Income Tax and national insurance contributions are calculated as described above. Where figures are grouped by marginal tax rate the starter and intermediate rates for Scottish taxpayers are included in the basic rate category.

5.4 Table 7

This table provides details from both the SA101 return and the Accounting for Tax Return, on individuals exceeding their annual allowance. From the Self Assessment Return, we provide the number of individuals reporting pension savings in excess of their annual allowance, and the total value of this excess saving. From the Accounting for Tax Return, we provide the number of members who requested their scheme pay a share (or all) of an annual allowance tax charge on their behalf, and the total value of these payments. Reported payments by the scheme will likely relate to excess pension savings reported via Self Assessment within the 2 prior tax years.

The Accounting for Tax and Self Assessment columns are not mutually exclusive, the same individual could appear in both columns. Individuals are required to report annual allowance breaches through Self Assessment returns even if their scheme pays the charge and reports the breach through Accounting for Tax returns. However, in practice individuals may be reported through Accounting for Tax and not report themselves through Self Assessment, or vice versa, in error.

The number of individuals and figures in the Accounting for Tax columns are based on the year in which the scheme initially reports the breach. The number of individuals and figures in the Self Assessment columns are based on the year for which the individual has filed their Self Assessment return.

As the figures relate to when a charge was reported, the lag between Accounting for Tax and Self Assessment reporting could mean an individual is included in different years of the Accounting for Tax and Self Assessment columns for the same charge. For example, if an individual breached the annual allowance in June 2017 and reported this through their Self Assessment return in January 2019, they’ll be included in the Self Assessment figure for 2017 to 2018. If they chose to use scheme pays, they are required to have made the scheme pays request by 31 July 2019 and the scheme will have had until 14 February 2020 to report and pay the charge to HMRC, so the individual would therefore be included in the 2019 to 2020 Accounting for Tax figure.

Individuals who haven’t used the scheme pays option but have reported their breach through Self Assessment will appear in the Self Assessment columns and not in the Accounting for Tax columns. Furthermore, the timing lag set out above could mean individuals are included in the Self Assessment column for a given year and not the corresponding Accounting for Tax column.

Table 7 includes aggregated totals from the AFT and Self Assessment returns. Schemes and individuals can amend their returns; therefore, this table can include revisions to historic years. Revisions will be made to the tax year that the charge was originally counted in.

5.5 Table 8

This table provides details from the Accounting for Tax Return (AFT) on lifetime allowance tax charges reported by the scheme on behalf of each of their members who exceed their lifetime allowance. We provide information on the number of members which had their scheme report a lifetime allowance tax charge on their behalf, and the total value of these charges. We also break this down by non-lump sum tax charges and lump sum tax charges, separately, as these are charged at different tax rates. Table 8 includes aggregated totals from the AFT return.

These statistics relate to when a tax charge liability was generated. AFT reporting deadlines are quarterly and depend upon the quarter in which the liability arose. The time period between an LTA charge liability being generated and the reporting deadline will be between roughly 1 and half to 4 and a half months. Schemes can amend their returns; therefore, this table can include revisions to historic years. Revisions will be made to the tax year that the charge was originally counted in.

5.6 Table 9

From September 2023, Table 9 on taxable flexible payments from pensions uses an improved methodology. Figures provided on taxable flexible payments from pensions in this statistics publication release are not comparable to those published previously due to these improvements. All figures in Table 9 have been revised accordingly. These improvements include a stricter definition of payments identified as flexibly accessed pension payments, as described below.

Information on taxable flexible payments is reported to HMRC via Real Time Information (RTI). Tax free payments or any elements of payments that are not taxed are not included in these statistics as it is optional for schemes to report these to HMRC. Where a flexibly accessed pension payment is reported as having taxable and non-taxable components, the taxable part is reported with these statistics.

Pensions schemes can flag a payment as being a flexibly accessed pension payment through RTI. In addition to this, for the purpose of these statistics, a taxable flexibly accessed pension payment must meet the following criteria:

• positive and non-zero value reported as a taxable pension amount in tax years 2016 to 2017 onwards

• positive and non-zero value reported as a taxable pay amount in tax year 2015 to 2016 only

• no reported National Insurance Contribution paid on the payment

• not flagged as an ill health payment

• not flagged as a Trivial Commutation Lump Sum

• not flagged as a Small Pot Lump Sum

Quarterly figures are presented, as well as tax year totals. The sum of Q2, Q3, Q4 and the following years Q1 will not total to the tax year figure due to difference in time periods. Quarters begin on 1 January, 1 April, 1 July, and 1 October. Tax years begin on 6 April and run until 5 April the following year. Previous publications summed quarters Q2, Q3, Q4 and the following years Q1 to present annual totals and so these are not comparable to the revised methodology.

The numbers published for tax year 2015 to 2016 are not comprehensive. To manage the burden on industry, reporting of flexible payments was optional for tax year 2015 to 2016, before becoming mandatory from April 2016. The increase in reported payments seen from April 2016 onwards is expected to partly result from this.

The figures for the total number of individuals receiving payments across quarters, across a tax year and since inception are estimated by aggregating using National Insurance number to avoid double counting individuals who have received multiple payments in each time frame. Cases with missing National Insurance numbers are removed from these estimates.