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.

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.

Tax if someone inherits your pension

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

  1. Step 1 Check when you can retire

  2. and Check how much pension you could get

  3. Step 2 Increase your pension

    You might be able to increase the amount you get if you delay your pension.

    1. Find out about delaying your pension

    You might be able to pay voluntary contributions to fill in gaps in your National Insurance record (such as, from when you were not working or claiming benefits).

    1. Check if you can pay voluntary National Insurance contributions

    For advice about increasing your workplace or private pension, speak to a financial adviser.

    1. Find a financial adviser through Unbiased
  4. Step 3 Check what other financial support you could get

  5. Step 4 Decide when to retire