Do you pay tax on the State Pension?

Yes, the State Pension is taxable income, but it is paid without tax taken off. You only pay tax if your total taxable income for the year, including the State Pension, goes above your personal allowances, which for most people is the £12,570 Personal Allowance. The full new State Pension is £241.30 a week, so it sits just under that figure on its own. Add a workplace pension or earnings and tax usually follows.

How HMRC counts your State Pension

HMRC taxes the amount you were entitled to over the tax year, not the payments that landed in your account. If you began receiving State Pension on or after 6 April 2010, a full year is counted as one week at the old weekly rate plus 51 weeks at the new rate after the April increase. The amounts are on your State Pension letter from the Department for Work and Pensions.

If you start part way through the year, you are taxed on the number of weeks from your entitlement date to the end of the tax year, even if your first payment was weeks later and included back pay. HMRC’s own example is a pension that started on 4 January 2026 at £170 a week, giving 13 weeks and £2,210 of taxable State Pension for that year.

That taxable figure goes on top of your other income, then allowances come off, then the usual rates apply. The Personal Allowance guide explains how the allowance is used up.

How the tax is collected

Which route HMRC uses depends on your other income.

If you have a job or a workplace pension, HMRC will usually change the tax code so the tax on your State Pension is taken from that pay. Most pension providers deduct tax through PAYE, and if you have more than one provider or employer, only one takes the tax for the State Pension. You can end up with different tax codes for different pensions and jobs. A much lower code than the standard one after you claim is normally this adjustment. Check it against the tax codes explained guide.

If the State Pension is your only income and you go over the allowance, HMRC sends a Simple Assessment tax bill telling you what you owe and how to pay. If your income is below the allowance, you will not usually pay anything.

If you complete Self Assessment, you include the annual State Pension amount on the return. People using Making Tax Digital for Income Tax software must check it has been included.

A hypothetical public sector example

Say you retire from the NHS with a workplace pension of £10,000 a year and you start the full State Pension of about £12,548 a year (£241.30 times 52). Your total income is about £22,548. After the £12,570 Personal Allowance, about £9,978 is taxed at 20 per cent in England, Wales and Northern Ireland. HMRC would usually change the tax code on the NHS pension to collect the tax due on the State Pension. Scottish rates differ.

If you are still working

You can claim your State Pension while you work, or put off claiming to get a higher weekly amount later. Either way, the pension counts as income. Your job’s tax code is likely to lose most of the Personal Allowance to the State Pension, so the job may be taxed at 20 per cent or more from the first pound. Employee National Insurance stops once you reach State Pension age, which National Insurance over State Pension age covers, but income tax carries on.

If you live abroad

You may be taxed on your pension by the country where you live and by the UK. GOV.UK says you pay UK tax on a pension from a UK provider, or if you count as a UK resident for tax purposes. A double taxation agreement between the UK and your country may mean you do not pay twice, and you need to tell HMRC if you move abroad.

If too much tax is taken

If you pay too much on a pension, you can claim a refund. If a pension provider pays you arrears from earlier years in one lump sum, that can push you into a higher bracket for a year, and HMRC can recalculate if you give it the provider’s written breakdown by tax year. Your personal tax account is the place to see what HMRC holds.

The wider rules on how State Pension amounts are decided are in the State Pension guide.