Tax on company, personal or foreign pensions :Cross Stitch – Money, tax and benefits

Any company, personal (including retirement annuity) or foreign pensions you get are taxable. How and whether you pay tax on your pension income depends on which type of pension you get and your overall taxable income after your tax-free allowances.

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.

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.