1. What’s taxed

You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates.

Your total income could include:

You may have to pay Income Tax at a higher rate if you take a large amount from a private pension. You may also owe extra tax at the end of the tax year.

Tax if your private pensions total more than £1 million

You usually pay tax if the total value of your private pensions is more than £1 million. Your pension provider will take off the tax before you get your payment.

Tax if someone inherits your pension

Other rules apply if someone inherits your State pension or your private pension.