Tax when you get a pension

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What’s taxed

You’ll pay tax on your pensions if your total taxable income is more than your Personal Allowance - this is usually £12,570.

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 renting out a property, savings interest or investments

Check if you have to pay tax on your pension

Before you can check, you’ll need to know for this tax year:

• what types of pensions you’ll get
• how much State Pension you’ll get - you can use your annual, weekly or 4-weekly amount
• how much private pension you’ll get
• the amount of any other taxable income you’ll get
• if you’ll receive or transfer Marriage Allowance

Use this online tool to calculate how much tax you may need to pay 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 paid you money owed from previous tax years

Your pension provider will usually pay any money they owe you from previous tax years (‘payment in arrears’) as a single payment. 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.

View a printable version of the whole guide