State Pension income is taxable but usually paid without any tax being deducted.

You no longer have to pay National Insurance contributions when you’ve reached State Pension age.

The amount of income tax you pay depends on your total annual income from all sources. For example: earnings (including State Pension)

• Profits from self-employment
• Rental income
• Other pensions (including the LGPS)
• Bank or building society interest
• Income from your investments.

You only pay Income Tax once your total annual income is above your Personal Allowance. The standard Personal Allowance for the tax year 2024/25 is £12,570.

Your Personal Allowance might be more or less than the standard figure due to a number of other factors.

HMRC should tell you how much your Personal Allowance is each time it changes.

If your total annual income is more than your Personal Allowance, you’re liable to pay Income Tax on the amount that exceeds the Personal Allowance.

Different rates of Income Tax apply, depending on the type of income and how much it is.

Although tax isn’t deducted from the State Pension, it will still use up some of your tax-free personal allowance. In 2024/25 the standard tax-free personal allowance is £12,570, which means that if you receive the full new State Pension, you will have £1,067.60 (£12,570 less £11,502.40) of your personal allowance remaining for other taxable income streams, such as your Local Government Pension.

HMRC supply us with a tax code that we must apply to your pension. If you have a query about your tax code please contact HMRC on 0300 200 3300 quoting the tax reference 673/SY2 and your National Insurance number.

Telephone queries: HM Revenue & Customs are open 8am-8pm Mon-Fri, 8am-4pm Saturday – 0300 200 3300