Income Tax on my pension

huxy1

I have taken a tax free lump sum from one of my pension pots, I am retiring early. My annual income will be below the £12500 threshold with the monthly pension, will the pension still be taxed?

MallyGirl

pensions are taxable but below £12500 income will be taxed at 0% so it will cost you no tax providing it is your only income

Dazed_and_C0nfused

huxy1 said:

I have taken a tax free lump sum from one of my pension pots, I am retiring early. My annual income will be below the £12500 threshold with the monthly pension, will the pension still be taxed?

Your post suggests you haven't actually retired yet.  In which case you won't be taxed if your total taxable income is less than £12,500*.

But if your combined taxable income from your job and the pension exceeds £12,500* then yes you would be liable to tax.

If your total taxable income includes savings interest or share dividends then you may also be able to use some of the 0% tax bands for these income types so not having any actual income to pay on theses sources of income

*this figure assumes you haven't applied for Marriage Allowance