In this section:
Any company, personal (including retirement annuity) or foreign pensions you get are taxable. How and whether you pay tax on your pension income depends on which type of pension you get and your overall taxable income after your tax-free allowances.
On this page:
How much tax - if any - you will pay on your pension income depends on the overall amount of taxable income you have.
Your taxable income may include:
If your taxable income is greater than your tax allowances you'll pay tax on some or all of your pension income in line with current Income Tax rates. If your taxable income is equal to or less than your allowances you won't pay any tax on your pension income.
Taxable and non-taxable income at a glance
Do you have to pay tax in retirement?
Income from all of these types of pension scheme is paid to you by the pension or annuity provider with tax already taken off via the PAYE (Pay As You Earn) System. Your Tax Office sends the provider your tax code telling them how much tax to deduct - including any due on your State Pension - taking into account your tax allowances (see link below).
You'll get a P60 at the end of the tax year showing your pension and the tax taken off. Keep this in case you have to fill in a tax return or need to claim tax back. Read the related guides to understand more.
Pensions, state benefits and your tax code
Age related and other tax allowances
Claiming back tax or National Insurance at State Pension age
Before 6 April 2007 retirement annuities weren't paid through PAYE. Instead they were paid to you with 22 per cent tax already deducted unless you made a claim to receive the payment 'gross' (without tax taken off) because your level of income meant you didn't need to pay tax.
Read the guide below to check whether you qualify to claim tax back if you paid tax this way unnecessarily.
Tax on retirement annuities - more information
Your UK pensions and State Pension will still be taxable in the UK unless there's a 'double taxation agreement' (covering pensions) with the country where you decide to live. If there is an agreement, you'll usually pay tax in that country.
If you get a pension for public service - like a teacher's, nurse's,
civil service or forces pension - then it'll normally be taxable in
the UK.. You'll have to fill in a Self Assessment tax return to claim
your personal tax-free allowances.
Contact HM Revenue & Customs (HMRC) for more details.
Tax when retiring abroad or back in the UK
Going abroad - HMRC Centre for Non-Residents
Find out more about retiring abroad from the Low Incomes Tax Reform Group (Opens new window)
Self Assessment for non-residents
If you receive a pension from a foreign country while you're living in the UK it will be subject to UK tax rules. How much tax you'll pay on overseas income depends on whether you're 'resident', 'ordinarily resident' or 'domiciled' in the UK. Read the related guidance below to find out more.
Tax when retiring abroad or back in the UK
Tax on overseas income - more information on the Directgov website (Opens new window)
Whenever you start getting a new pension, tell your Tax Office - this will help make sure you pay the right amount of tax.
Understanding the basic State Pension - Directgov website (Opens new window)
Find lost pension details through the Pension Tracing Service - Directgov website (Opens new window)
The International Pension Centre - Directgov website (Opens new window)
