Paying tax on your pension

Overview

Your monthly pension is a taxable income depending on your total income and personal tax allowances. HM Revenue and Customs (HMRC) determine your tax allowances and supply us with a tax code which we must operate. Once we receive official notification from HMRC we will apply the correct code. Only HMRC can instruct us which tax code to apply to your payments.

Tax errors in April 2021

Some of our pensioners may not have had the correct tax code applied to their pension payment in April and May. This error is now fixed.  However, if this affects you , when we pay your pension in June 2021, although the tax code used will be correct, you may pay a different amount of tax than normal. If you have since been notified of a further change to your tax code this will be used in your June 2021 pension payment.

We understand that you may be worried about how this will affect your tax position. Please be assured that we have been working with HMRC to make sure that the correct amount of tax will be taken from your pension for this tax year. You do not need to contact HMRC about this matter.

In your July payment you will pay the normal amount of tax and your tax will be correct for the rest of the year (unless HMRC make any further changes to your tax code). 

If you want to check your monthly payments, you can use your Help using your mypension account account to view your payslips which show the tax code used and your pension payments and deductions. Your June payslip will be available to view by 11 June 2021.

Please accept our sincere apologies for this error and any distress this may have caused and be assured that steps have been put into place so that this does not happen again.