Tax on workplace, personal or foreign pensions

Any workplace, personal (including a 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 will you pay on your pension income?

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:

  • State Pension
  • income from a retirement annuity, personal, stakeholder and/or workplace pension
  • any taxable State Benefits you may qualify for
  • savings or investments
  • income from a job if you work after State Pension age

If your taxable income is greater than your tax allowances you'll pay tax on some or all of your pension income. 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 Tax - the basics

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How you pay tax on workplace and personal pensions, including retirement annuities

Income from all 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. HM Revenue & Customs (HMRC) 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. Find out more by following the second link below.

You'll get a form P60 End of Year Certificate 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

Claiming back tax or National Insurance at State Pension age

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Tax on income from retirement annuities before 6 April 2007

Before 6 April 2007 retirement annuities weren't paid through PAYE. Instead they were paid with 22 per cent tax already deducted. If your level of income meant you didn't need to pay tax you made a claim to receive the payment 'gross' (without tax taken off).

Read the guide below to check whether you qualify to claim tax back if you paid tax this way unnecessarily.

Tax on retirement annuities

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How will your pensions be taxed if you retire abroad?

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 - such as a teacher's, nurse's, civil service or forces pension -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.

Tax when retiring abroad or back in the UK

Tax when leaving the UK

Making a claim under a double taxation agreement

Filing a tax return if you live or work outside the UK

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Tax on foreign pensions

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

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More useful links

Contact HMRC

Find a lost pension on GOV.UK (Opens new window)

State Pension if you retire abroad on GOV.UK (Opens new window)

Retiring abroad from the Low Incomes Tax Reform Group (Opens new window)

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