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Phone 0800 1223 170

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Lines open: Mon - Fri 9am- 5:30pm

Phone 0800 1223 170

to make a telephone application

Lines open: Mon - Fri 9am- 5:30pm

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Copyright 2016 by Pension Tracing Service ® 

This service is not affiliated with the Department of Work and Pensions or any government body. The Pension Tracing Service does not offer financial advice to our clients. However we can allocate you an Authorised and Regulated Pension Specialist. 

Copyright 2016 by Pension Tracing Service ® 

This service is not affiliated with the Department of Work and Pensions or any government body. The Pension Tracing Service does not offer financial advice to our clients. However we can allocate you an Authorised and Regulated Pension Specialist. 

Paying tax in retirement

Paying tax in retirement

Upon reaching State Pension Age, there is no further need to make National Insurance contributions. However, being retired means you still have to pay income tax, and this includes pensions and state pensions if your total exceeds the tax-free allowances.

Should I be paying tax?

Upon reaching State Pension Age, there is no further need to make National Insurance contributions. However, being retired means you still have to pay income tax, and this includes pensions and state pensions if your total exceeds the tax-free allowances.

Should I be paying tax?

Help me

Help me

my pensions

my pensions

Add up all taxable income

Work out tax-free allowances

Deduct tax-free allowances from taxable income

Add up all taxable income

Work out tax-free allowances

Deduct tax-free allowances from taxable income

If you should be paying tax in retirement, your pension office may have already contacted you. You should fill in a Pension Coding form P161. It is possible to download this form online and contact your tax office. To work out if you need to pay tax in retirement you should:If your taxable income is greater than your tax-free allowances you will have to pay tax. However, if your tax-free allowances are the same as or more than your taxable income, and you do not have to pay tax.

Taxable income examples

If you should be paying tax in retirement, your pension office may have already contacted you. You should fill in a Pension Coding form P161. It is possible to download this form online and contact your tax office. To work out if you need to pay tax in retirement you should:If your taxable income is greater than your tax-free allowances you will have to pay tax. However, if your tax-free allowances are the same as or more than your taxable income, and you do not have to pay tax.

Taxable income examples

Pension income (including State Pension)

Employment/self-employment income if you keep working

Almost all bank and building society interest

Dividends

Income from property after expenses excluding the first £4,250 if you rent out a room in your house

Income from overseas (overseas pensions have a 10% deduction so you are only taxed on 90% of the total amount)

Some benefits, including Carer’s Allowance and, in some cases, Incapacity Benefit

Pension income (including State Pension)

Employment/self-employment income if you keep working

Almost all bank and building society interest

Dividends

Income from property after expenses excluding the first £4,250 if you rent out a room in your house

Income from overseas (overseas pensions have a 10% deduction so you are only taxed on 90% of the total amount)

Some benefits, including Carer’s Allowance and, in some cases, Incapacity Benefit

If you are married or in a civil partnership and have income from savings, investments or property held in joint names you’re usually treated as getting half the income each. So you only have to pay tax on your half. If you’re not married or in a civil partnership you count only your share of joint income.

Non-taxable income includes

If you are married or in a civil partnership and have income from savings, investments or property held in joint names you’re usually treated as getting half the income each. So you only have to pay tax on your half. If you’re not married or in a civil partnership you count only your share of joint income.

Non-taxable income includes

Pension Credit

Working Tax Credit and Child Tax Credit

Income or interest from an Individual Savings Account (ISA), a Personal Equity Plan (PEP), or a Tax Exempt Special Savings Account (TESSA)

Interest from National Savings Certificates

Interest and bonuses from a Save As You Earn (SAYE) scheme

Premium Bond and National Lottery winnings

Certain benefits, including Cold Weather Payments, Attendance Allowance, Income Support and Disability Living Allowance

Lump sum pension payments

Pension Credit

Working Tax Credit and Child Tax Credit

Income or interest from an Individual Savings Account (ISA), a Personal Equity Plan (PEP), or a Tax Exempt Special Savings Account (TESSA)

Interest from National Savings Certificates

Interest and bonuses from a Save As You Earn (SAYE) scheme

Premium Bond and National Lottery winnings

Certain benefits, including Cold Weather Payments, Attendance Allowance, Income Support and Disability Living Allowance

Lump sum pension payments

Tax-free allowances

Tax-free allowances

Personal Allowance

Blind Person’s Allowance

Personal Allowance

Blind Person’s Allowance