Income tax

You don’t pay National Insurance contributions on any payments you get from a pension scheme including guaranteed income from an annuity. But you might have to pay Income Tax on these payments.

You’ll still have to pay tax when you retire if:

• your income is high enough and
• depending on your personal tax allowance.

The tax you pay depends on your age, marital status, and the total amount of income you get. The following items could be used in what makes up your taxable income:

• the pension you get from us
• any other pension you get, including the State Pension
• unemployment benefit
• earnings from other jobs / self-employment
• interest on some savings and investments

 If you get a lump sum retirement grant as part of your pension this is paid tax free.