Tax on pension arrears

SpringChicken01

Hello. I'm wondering if anyone has experience / knowledge about tax on pension arrears. My father recently gave up work at the age of 75. He had a Royal Mail workplace pension that he didn't claim until now, and they will be paying him 16 years of arrears that would have been paid to him whilst he was still working, if he'd requested it. There is no mention of tax being applied to the arrears, so I'm wondering if he is expected to pay tax on this despite the fact that the pension provider does not mention it.

MallyGirl

he will pay tax and initially it might be more than is eventually due. If it is his first drawdown then the pension will have to use the mandated tax code which might be emergency or basic rate. It will be sorted in the end if he has overpaid tax - or underpaid depending on his earnings and presumably state pension

Ayr_Rage

Pension income is taxed.

Marcon

https://forums.moneysavingexpert.com/discussion/6655884/tax-on-pension-arrears

The fact he is being paid 16 years of arrears indicates this is a defined benefit pension (drawdown applies to defined contribution arrangements).

The arrears will be paid as a lump sum and taxed at his marginal rate - and given the arrears go back for 16 years, that could well be higher than basic rate. For a way to deal with this, see the first page or so of this thread:

https://forums.moneysavingexpert.com/discussion/6610482/civil-service-pension-tax