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HMRC internal manual

PAYE Manual

PAYE operation: pensioners: pension paid by pension fund

Where a pension is paid by the trustees of a pension fund, a non RTI employer must

  • Treat the employee as having left and issue a P45
  • Mark the top of the P45 Part 1 `Pensioner’

In addition, the pension payer must

  • Mark the top of the P45 Part 3 `Pensioner - Week 1 / Month 1 basis applied’
  • Operate the existing code on a Week 1 / Month 1 basis until fresh instructions are received

All new pensions must be notified irrespective of the amount of the pension or age of the pensioner. Offices should not enter into different arrangements with pension payers.