Your pension and tax

Do you know how your retirement income will be taxed and how pension tax allowances work?

Knowing this can help you plan your financial future more effectively. Your tax position may be more complicated that it first appears, so it’s always a good idea to consider getting impartial financial advice if you’re unsure.

Pensions and tax in retirement

Tax rules differ before and after retirement.

Pension tax allowances

There are tax allowances that may apply to your retirement benefits if they reach a certain amount.

It’s your responsibility to monitor your progress against these allowances and to make sure any tax charges are paid. If your retirement benefits go over any of the pension tax allowances, you could face a tax charge on the excess.

A summary of the allowances is below.

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