Tax and your pension

You don’t pay National Insurance contributions on any payments you get from a pension scheme including guaranteed income from an annuity. But you might have to pay Income Tax on these payments.

You’ll still have to pay tax when you retire if:

• your income is high enough and
• depending on your personal tax allowance.

The tax you pay depends on your age, marital status, and the total amount of income you get. The following items could be used in what makes up your taxable income:

• the pension you get from us
• any other pension you get, including the State Pension
• unemployment benefit
• earnings from other jobs / self-employment
• interest on some savings and investments

 If you get a lump sum retirement grant as part of your pension this is paid tax free.

Queries

If you’ve any tax queries, please contact the tax office on the details below:

Address: Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS.

Phone: 0300 200 3300

You’ll need to quote one of the following reference numbers:

For more information about Tax and your Pension, please visit HMRC or Gov.uk.

Annual allowance

The annual allowance (AA) is set by HMRC. It’s the amount your pension savings can increase in any one year without you having to pay a tax charge. If your savings increase by more than the AA, you’ll have to pay tax on the excess. Most people won’t be affected by the AA because their pension savings won’t increase by more than the limit. Or, if it does, they’re likely to have unused allowance from previous tax years that can be carried forward.

If, you’re affected we’ll let you know by no later than 6 October following the end of the relevant tax year.

For information on:

• who’s affected by the AA
• how it’s calculated
• tapered AA
• how to pay

please read the annual allowance factsheet on our guides page. You can also find more information on tax and your pension on the LGPS members website.