Tax when you get a pension

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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:

• the State Pension you get (either the basic State Pension or the new State Pension)
• Additional State Pension
• a private pension (workplace or personal) - you can take some of this tax-free
• earnings from employment or self-employment
• any taxable benefits you get
• any other income, such as money from investments, property or savings

This guide is also available in Welsh (Cymraeg).

Check if you have to pay tax on your pension

Before you can check, you’ll need to know:

• if you have a State Pension or a private pension
• how much State Pension and private pension income you will get this tax year (6 April to 5 April)
• the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits)

You cannot use this tool if you get:

• any foreign income
• Marriage Allowance
• Blind Person’s Allowance

Use this online tool to check if you have to pay tax on your pension.

If you take some or all of your pension as a lump sum

You’ll pay Income Tax on any part of the lump sum that goes above either:

• your lump sum allowance 
• your lump sum and death benefit allowance

Find out what your lump sum allowances are.

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.

If your pension provider owed you money and has paid this as a lump sum

Your pension provider will usually pay any money they owe you from previous tax years (‘payment in arrears’) as a single lump sum. This could have temporarily put you into a higher tax bracket and meant that you paid too much tax.

You can ask HM Revenue and Customs (HMRC) to recalculate your tax.

1. Ask your pension provider for a written breakdown (often called a ‘payment schedule’) showing exactly how much money you were owed for each tax year.

2. Contact HMRC to give them this information and ask them to recalculate your payment for each tax year. You can upload documents digitally through your personal tax account or send them by post.

3. HMRC will refund any extra tax you’ve paid this year.

Tax if someone inherits your pension

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

View a printable version of the whole guide