Tax on your State Pension

The State Pension counts as taxable income but is paid to you without tax taken off. How you pay the tax due on your State Pension will depend on a number of factors. If your income is low there may be no tax to pay - and you may be able to get other benefits.

On this page:

Should you be paying tax on your State Pension?

The basic State Pension is based on the National Insurance contributions you've paid or have been credited with during your working life. When you reach State Pension age you no longer pay National Insurance contributions. However, you don't automatically stop paying Income Tax. If your total taxable income from work, private pensions and your State Pension is more than your tax-free personal allowance you're still a taxpayer. You must contact HM Revenue & Customs (HMRC) if you're not already paying tax. If your tax-free allowances are the same as or more than your taxable income, no action is necessary. If you think that you shouldn't be paying tax but are, you may be able to claim a refund.

Taxable and non-taxable income at a glance

Do you have to pay tax in retirement?

Contact HMRC - Income Tax enquiries for individuals pensioners and employees

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How you pay tax on your State Pension

If you already get another pension

If you get another pension (like a retirement annuity or a personal or workplace pension) and you pay tax on this you'll usually pay tax on your State Pension at the same time. This is done through the PAYE (Pay As You Earn) scheme. HMRC sends a tax code to your pension payer to tell them how much tax to take off, including any due on your State Pension. This might make the tax on your workplace or personal pension seem high but it's because it includes the tax due on your State Pension.

Tax if you only get the State Pension

The way that you pay tax on your State Pension depends on whether you are employed or not:

  • if you're working, you'll pay tax through your employer's PAYE scheme depending on the amount you earn
  • if you're not working, you'll need to pay tax through Self Assessment by completing a tax return

If you don't normally complete a tax return, you'll need to use form SA1 to register for Self Assessment before you can get a tax return.

Form SA1 to register for Self Assessment

Registering for Self Assessment

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Checking that your tax code is right

If your pension is taxed through your employer or your pension provider you'll receive a PAYE Coding Notice (form P2) from HMRC at least once a year telling you your tax code. It's important to check this to make sure it shows the right amount of tax on your State Pension. Read the guides below to find out more.

Pensions, state benefits and your tax code

Understanding your PAYE Coding Notice

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If you think you've paid too much tax on your pension

The Pension Service tells HM Revenue & Customs (HMRC) how much State Pension you receive.

If you think you're paying too much tax through your pension, or shouldn't be paying tax at all, there are steps you can take to claim a refund.

Claim back tax if you've had too much deducted from your pension

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More useful links

State Pension on GOV.UK (Opens new window)

National Insurance - the basics

Do you have to pay tax in retirement?

Claiming back overpaid National Insurance contributions

Income Tax rates and allowances

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