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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 company 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? (pensions and retirement planning section)

• Income Tax - the basics

How you pay tax on company 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 (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. Follow the links below to understand more.

• Pensions, state benefits and your tax code

• Claiming back tax or National Insurance at State Pension age (pensions and retirement planning section)

• Age-related tax allowances

Tax on income from retirement annuities before 6 April 2023

Before 6 April 2023 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).

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

• Tax on retirement annuities

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 Opens new window

• Tax when leaving the UK Opens new window

• Find out more about retiring abroad from the Low Incomes Tax Reform Group Opens new window

• Filing a tax return if you live or work outside the UK Opens new window

• Residence Opens new window

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 on overseas income

• Tax when retiring abroad or back in the UK Opens new window

More useful links

• Pension Tracing Service - trace a personal or company pension scheme (pensions and retirement planning section)

• Filing a tax return if you live or work outside the UK Opens new window

• Residence Opens new window

Useful contacts

• International Pension Centre

• Contact HMRC - Income Tax enquiries for individuals, pensioners and employees Opens new window