How your pension income is taxed
Your State Pension and any company or personal pensions you receive are taxable. State Pensions are paid without tax deducted, but company and personal pensions usually have tax deducted. How you pay tax on your pension income depends on which type of pension you receive and your overall taxable income. If you're on a low income you may be able to claim a tax refund.

Tax on State Pensions
Your State Pension is taxable income, even if it's based on a spouse's NI contributions but you receive it without any tax taken off, so it must be declared.

The Department for Works and Pensions automatically notifies the tax office when you start receiving your State Pension. But there may be some delay, so it is advisable to tell them yourself - to avoid getting behind with any tax payments that are due.

Tax on income from company or personal pensions set up after July 1988
Income from these schemes is paid via the PAYE system with tax already taken off. The Tax Office sends your pension provider your tax code number, telling them how much tax to deduct taking into account your State Pension and personal allowances.

At the end of the tax year you receive a P60 showing your pension and the tax taken off. Use this when filling in a tax return or claiming tax back.

Tax on income from retirement annuities
If your pension comes from a pension plan set up before July 1988 it's called a 'retirement annuity'

Income from retirement annuities is now paid via the PAYE system with tax already taken off. Your Tax Office sends your annuity provider your tax code number, telling them how much tax to deduct (including any due on your State Pension) and taking into account your personal allowances.  You'll get a P60 at the end of the tax year showing your annuity and the tax taken off. Keep this in case you have to fill in a tax return or need to claim tax back.

Claiming back overpaid tax in retirement