Is my pension taxable?

The answer to whether pensions are taxable depends on how much you take out. Defined contributions give you 25% tax free with the remainder taxed as it is accessed. But this can be offset by your personal allowance which came into force from April 2019. Defined benefit pension differ as you get paid a set income but you still have that personal allowance included with that.

A pension is essentially a replacement income and will be attached to any other income for that tax year and tax according to those brackets. But do remember you have your personal allowance that you can offset against any taxable income. Essentially, exceeding your personal allowance makes any income you receive from your pension taxable.

More information around tax can be found in our resource center