# Tax on the State Pension and other retirement income in 2026/27 > The State Pension is taxable income, but it is paid without tax taken off. This guide explains how it is added to other pensions, how HMRC collects… - URL: https://centiview.com/uk-money/tax-on-state-pension-and-other-retirement-income - Published: 2026-10-18T17:37:00.000Z - Figures checked: 2026-10-18 - Edited by David A - Topic: Pensions (UK) - Publisher: Centiview (Persie Ltd, London) - General information only, not financial advice The State Pension is taxable income, but it is paid without tax taken off. This guide explains how it is added to other pensions, how HMRC collects the tax, and what is tax-free. ## Who this guide is for It is general information for people in the UK who are receiving, or will soon receive, the State Pension, a workplace or personal pension, or both. It uses the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027. It is not personal advice and does not cover people who pay tax in another country, or the rules for inherited pensions. Scotland has its own Income Tax rates and bands for most income, including pensions, which are summarised below. ## How the State Pension is taxed The State Pension is treated as income, in the same way as pay from a job. GOV.UK says it is not taxed before you receive it, so the full amount lands in your bank account. Whether you owe any tax depends on your total income across the whole tax year: State Pension, any workplace or private pension, earnings, rental income and so on. Tax is due only on the part of that total above your Personal Allowance, the amount you can receive each year before paying Income Tax, which is usually £12,570 in 2026/27. Because the State Pension has no tax deducted, the tax on it has to be collected another way. If you have a private pension or a job, HMRC usually changes your tax code, the set of numbers and letters that tells your pension provider or employer how much tax-free income to allow, so that extra tax is taken from that income. If you have more than one pension or employer, only one of them takes the tax relating to your State Pension, and you may have a different tax code for each pension and job. ## The key figures > **Key numbers** Full new State Pension from 6 April 2026: £241.30 a week (up 4.8% from £230.25). Full basic State Pension: £184.90 a week (up from £176.45). Personal Allowance 2026/27: £12,570. Tax-free lump sum cap: £268,275. England, Wales and Northern Ireland rates: 20% on income from £12,571 to £50,270, 40% to £125,140, 45% above. Checked 18 October 2026. Many people get less than the full amount, because it depends on your National Insurance record. The full new State Pension of £241.30 a week works out at about £12,547.60 over 52 weeks (£241.30 x 52). That is £22.40 below the £12,570 Personal Allowance, so someone with only a full new State Pension and no other income would usually have no Income Tax to pay in 2026/27, although the gap is small. Any other taxable income, or a rise in the State Pension in a later year, can change that picture. ## A worked example The figures here are illustrative only. For example, suppose someone receives the full new State Pension of about £12,547.60 over the year and also a workplace pension of £6,000. Their total income is £18,547.60. Subtracting the £12,570 Personal Allowance leaves £5,977.60 of taxable income. At the 20% basic rate used in England, Wales and Northern Ireland, the tax is £5,977.60 x 0.20 = £1,195.52 for the year. Because the State Pension is paid in full, that whole amount would normally be collected through the workplace pension, by changing its tax code, at roughly £99.63 a month (£1,195.52 divided by 12, rounded). ## What is tax-free You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum, subject to a maximum of £268,275 in total. Everything else you take from the pension counts as taxable income in the year you receive it. For example, if someone with a pension pot of £40,000 took 25% as a lump sum, that would be £10,000 tax-free (£40,000 x 0.25), with the remaining £30,000 taxed as pension income when drawn. Taking a large amount in a single year can push total income into a higher tax band. Separate rules exist for small pots of up to £10,000 and for a pension totalling £30,000 or less, and for people with serious ill health. ## How the tax is paid - Workplace or private pension: the provider normally deducts Income Tax through PAYE (Pay As You Earn) before paying you, and sends a P60 at the end of the tax year showing the tax paid. - State Pension as your only income: if your total goes over the Personal Allowance, HMRC sends a Simple Assessment, a tax bill showing what you owe and how to pay it. If you are under the allowance, you usually do not need to pay. - Self Assessment: if you are required to send a tax return, State Pension and private pension income must be included in it. - Overpaid tax: if too much tax has been taken, you can claim a refund from HMRC. ## Scotland and the rest of the UK Rates differ by nation. In England, Wales and Northern Ireland the 2026/27 rates are 0% up to £12,570, 20% to £50,270, 40% to £125,140 and 45% above that. If you live in Scotland, Scottish Income Tax applies to pension income as well as pay, with seven bands in 2026/27: 19% starter rate from £12,571, 20% from £16,538, 21% from £29,527, 42% from £43,663, 45% from £75,001 and 48% above £125,140. Savings interest and dividends are taxed at UK-wide rates. Which table applies depends on where you live. ## Common mistakes and what to check Many people assume that a State Pension means no tax at all, then find a tax code with a lower allowance after a small private pension starts. Others do not realise that pension income from different providers can lead to more than one tax code, or that a code based on an estimate may collect too much or too little until it is corrected. It can be worth checking the notice of coding sent by HMRC, comparing the figures with your actual pension income, and looking at your P60 after the tax year ends. If you think too much tax was taken, you can ask HMRC for a refund. MoneyHelper offers free, impartial guidance on pensions and tax. ## Check before you act Tax rates, allowances and State Pension amounts change, usually each April. Confirm the current figures on the official pages linked below before relying on anything in this guide. ### Sources - [GOV.UK: Tax when you get a pension](https://www.gov.uk/tax-on-pension) - [GOV.UK: Tax when you get a pension, how your tax is paid](https://www.gov.uk/tax-on-pension/how-your-tax-is-paid) - [GOV.UK: Tax when you get a pension, what is tax-free](https://www.gov.uk/tax-on-pension/tax-free) - [GOV.UK: Income Tax rates and Personal Allowances](https://www.gov.uk/income-tax-rates) - [GOV.UK: Scottish Income Tax, how it works](https://www.gov.uk/scottish-rate-income-tax/how-it-works) - [GOV.UK: Over 12 million pensioners to receive 575 State Pension boost](https://www.gov.uk/government/news/over-12-million-pensioners-to-receive-575-state-pension-boost)