Will I pay tax on deferred pension+earnings

Catbells

I have deferred my pension for one year and will start to receive it later this year. I have been earnt £3600 over the past year. I understood I would receive the pension as a lump sum - but heard that it may be taxable. Together with my earnings the total will be around £9,600 - pension will be around £6000 and earnings as stated above. Thanks.

xylophone

I have been earnt £3600 over the past year

In the current tax year?

I have deferred my pension for one year and will start to receive it later this year.

In the tax year 2014-15?

http://www.hmrc.gov.uk/pensioners/pension-later.htm

https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2014-15/tax-and-tax-credit-rates-and-thresholds-for-2014-15

greenglide

Catbells wrote: »

I understood I would receive the pension as a lump sum - but heard that it may be taxable.

If it is State Pension that has been deferred then you have the option of receiving the reward for defering as an increase in the pension.

For defering for a complete year you receive an increase in pension of over 10% inflation proofed with 50% inheritable by your spouse if they should outlive you. In the majority of cases it is financialy the best but.