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: 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 investments, property or savings This guide is also available in Welsh (Cymraeg) . Check if you have to pay tax on your pension Before you can check, you’ll need to know: if you have a State Pension or a private pension how much State Pension and private pension income you will get this tax year (6 April to 5 April) the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits ) You cannot use this tool if you get: any foreign income Marriage Allowance Blind Person’s Allowance Use this online tool to check if you have to pay tax 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. Tax if someone inherits your pension Different rules apply if someone inherits your State pension or your private pension .

You will not usually pay any tax if your total annual income adds up to less than your Personal Allowance - this is usually £12,570. Lump sums from your pension You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is £268,275. If you hold a protected allowance, this may increase the amount of tax-free lump sums you can take from your pensions. The tax-free lump sum does not affect your Personal Allowance. Tax is taken off the remaining amount before you get it. Example Your whole pension is worth £60,000. You take £15,000 tax-free. Your pension provider will then take off the tax from the remaining £45,000. When you can take your pension depends on your pension scheme’s rules. It’s usually 55 at the earliest. You might have to pay Income Tax at a higher rate if you take a large amount from your pension. You could also owe extra tax at the end of the tax year. How you can take your pension A pension worth up to £10,000 You can usually take any pension worth up to £10,000 in one go. This is called a ‘small pot’ lump sum. If you take this option, 25% is tax-free. You can usually get: up to 3 small pot lump sums from different personal pensions unlimited small pot lump sums from different workplace pensions A pension worth up to £30,000 that includes a defined benefit pension If you have £30,000 or less in all of your private pensions, you can usually take everything you have in your defined benefit pension or defined contribution pension as a ‘trivial commutation’ lump sum. If you take this option, 25% is tax-free. If this lump sum is paid from more than one pension, you must: have your savings in each scheme valued by the provider on the same day, no more than 3 months before you get the first payment get all payments within 12 months of the first payment If you take payments from a pension before taking the rest as a lump sum, you pay tax on the whole lump sum. Cash from a defined contribution pension Check with your provider about how you can take money from a defined contribution pension. You can take: all the money built up in your pension as cash smaller cash sums from your pension You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is £268,275. If you hold a protected allowance, this may increase the amount of tax-free lump sums you can take from your pensions . You may have to pay a tax charge on money you put into your pension after you withdraw cash. If your life expectancy is less than a year You may be able to take all the money in your pension as a tax-free lump sum, if all of the following apply: you’re expected to live less than a year because of serious illness you’re under 75 it’s below your lump sum and death benefit allowance You’ll pay Income Tax on some or all of the lump sum if: you’re over 75 it goes above your lump sum and death benefit allowance Check with your pension provider. Some pension funds will keep at least 50% of your pension for your spouse or civil partner.

The way tax is paid depends on the kind of pension you get, and whether you have any other income. If you get the State Pension and a private pension Your private pension provider will usually take off any tax you owe before they pay you. This includes any tax you owe on your State Pension. If you get payments from more than one provider (for example, from a workplace pension and a personal pension), HM Revenue and Customs ( HMRC ) will ask one of your providers to take the tax off your State Pension. At the end of the tax year you’ll get a P60 from your pension provider showing how much tax you’ve paid. If the State Pension is your only income If you go over your Personal Allowance and you have tax to pay, HMRC will send you a Simple Assessment tax bill . This will tell you how much you owe and how to pay it. After your first year of getting the State Pension, you’ll pay tax based on 52 weeks of payments each year. If your income is below your Personal Allowance, you usually will not need to pay tax. If you’re working and getting a pension Your employer will usually take any tax you owe off your earnings, including any tax you owe on your pension. If you’re self-employed you must fill in a Self Assessment tax return at the end of the tax year. You must declare your overall income, including the State Pension and money from private pensions, for example your workplace pension. If you have other income You must let HMRC know about any income you receive that is not from an employer or a pension. You might have to fill in a Self Assessment tax return to report this. If you owe any tax on investment income, HMRC will send you a calculation telling you how much you owe and how to pay it. Tax codes If your income only comes from one source you’ll usually have one tax code . You can have several tax codes if you have income from more than one source. You can get your tax code corrected if you think it’s wrong.

Tax when you live abroad

You may be taxed on your pension by the country where you’re resident and by the UK. You’ll pay UK tax on your pension if either: you receive your pension from a UK provider you’re classed as a UK resident for tax purposes The amount you pay depends on your income. You need to tell HMRC if you move abroad . You may not have to pay twice if the country you’re resident in has a ‘double-taxation agreement’ with the UK. Your country’s tax treaty will tell you where to pay tax.

Higher tax on unauthorised payments

You’ll pay up to 55% tax on payments from your pension provider if they make an ‘unauthorised payment’ . This is a payment made outside of the government’s tax rules and usually includes: any payments before you’re 55 (there are exceptions ) a ‘trivial commutation’ lump sum of over £30,000 regular payments into your account after you’ve died Some companies advertise personal loans or cash advances if you take your pension early. These payments are unauthorised and you have to pay tax on them.

Tax when you get a pension

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:

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 investments, property or savings

This guide is also available in Welsh (Cymraeg).

Check if you have to pay tax on your pension

Before you can check, you’ll need to know:

if you have a State Pension or a private pension
how much State Pension and private pension income you will get this tax year (6 April to 5 April)
the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits)

You cannot use this tool if you get:

any foreign income
Marriage Allowance
Blind Person’s Allowance

Use this online tool to check if you have to pay tax 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.

Tax if someone inherits your pension

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

View a printable version of the whole guide

Step 1 Check when you can retire
and Check how much pension you could get
1. Find out how much State Pension you could get (your forecast)
You may also be paying into a:
- workplace pension
- personal pension
1. You are currently viewing: Find out if you’ll pay tax on your pension
2. Find contact details for a lost pension
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
Step 3 Check what other financial support you could get
Check what financial help you could get if you:
You can also get free bus travel if you:
- apply for a bus pass
Step 4 Decide when to retire
1. Get advice on planning your pension and deciding when to retire

Tax when you get a pension

What’s taxed

Check if you have to pay tax on your pension

If you take some or all of your pension as a lump sum

Tax if someone inherits your pension

Step 1 Check when you can retire

and Check how much pension you could get

Step 2 Increase your pension

Step 3 Check what other financial support you could get

Step 4 Decide when to retire

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Tax when you get a pension

What’s taxed

Check if you have to pay tax on your pension

If you take some or all of your pension as a lump sum

Tax if someone inherits your pension

Part of Plan your retirement income: step by step

Step 1: Check when you can retire

and Check how much pension you could get

Step 2: Increase your pension

Step 3: Check what other financial support you could get

Step 4: Decide when to retire

Is this page useful?

Help us improve GOV.UK

Help us improve GOV.UK

Step 1 Check when you can retire

Step 2 Increase your pension

Step 3 Check what other financial support you could get

Step 4 Decide when to retire