Reporting pension contributions and payments via Self Assessment

More than 12.6m people in the UK receive the State Pension, while millions also receive payments from company or personal pensions and retirement annuities. Some people living in the UK receive pension payments from overseas. Personal…

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Last Updated: 3rd April 2024

More than 12.6m people in the UK receive the State Pension, while millions also receive payments from company or personal pensions and retirement annuities. Some people living in the UK receive pension payments from overseas.

Personal pensions include stakeholder pensions and self-invested personal pensions (SIPPs – where you or a professional financial adviser determine your additional pension investments). Annuities are sold by insurance companies and you can buy one with some or all of your pension pot. They can provide a regular guaranteed income on your retirement.

Tax relief on pension contributions

Contributions you make to HMRC-registered private pension schemes (eg workplace pensions, personal and stakeholder pensions and some overseas pension schemes) are tax-free up to certain thresholds.

  • Tax is usually payable if savings in your pension pot go over 100% of your earnings in a year or above £60,000 a year (your “annual allowance”).
  • Tax can also be payable if your pension provider isn’t registered for tax relief with HMRC or they do not invest your pension savings in line with HMRC requirements.
  • UK tax relief can be available on contributions you make to some types of overseas pension schemes.

Need to know! You can “carry forward” any unused annual allowance from the previous three tax years, if you were a member of a registered pension scheme during that period. This can really benefit self-employed people whose earnings change significantly year to year or you want to make large pension contributions.

Paying tax on pension payments

You pay tax on pension payments you receive if your total taxable annual income exceeds your Personal Allowance (which is £12,570 for the 2024/25 tax year). Your total taxable income can include:

  • the State Pension (either the basic State Pension or the new State Pension)
  • Additional State Pension (AKA the State Second Pension or SERPS)
  • private pensions (workplace or personal)
  • earnings from employment or self-employment
  • taxable benefits you receive
  • money from investments, rental property income or savings interest.

Need to know! Income Tax may be payable at a higher rate if you take a large payment from a private pension. You may also owe extra tax at the end of the tax year.

  • If you get the State Pension and a private pension, your pension provider will deduct any tax you owe before they pay you, as well as any tax payable on your State Pension.
  • If you receive payments from multiple providers (eg workplace pension and personal pension), HMRC will ask one of your providers to deduct any tax payable from your State Pension. You’ll get a P60 at the end of the year to show how much tax you’ve paid.
  • The State Pension is taxable income. If the only income you receive is the State Pension and you started receiving it after 5 April 2016, HMRC will write to you to tell you how much tax is payable and how to pay.
  • If you’ve been receiving the State Pension since before 6 April 2016, you should have been paying any tax due after completing and filing a Self Assessment tax return. You’re responsible for paying any tax due on State Pension payments you’ve received.
  • If you continue to work post retirement, any tax you owe for State Pension payments received will be collected by your employer via their payroll and “Pay As You Earn”.
  • If you’re self-employed and have taxable income, you report pension payments that you receive, together with all other taxable income, via your annual Self Assessment tax return (SA100).

Need to know! You can take up to 25% of your pension as a tax-free lump sum.

Reporting pension contributions to HMRC

In the tax reliefs section of your SA100 Self Assessment tax return, under “Payments to registered pension schemes where basic-rate tax relief will be claimed by your pension provider”, you include the total gross value of your personal pension contributions.

On page 4 of the SA100 Self Assessment tax return, fill in boxes 1 to 3 for payments to registered pension schemes and box 4 for payments to overseas pension schemes.

Need to know! Do not include personal term assurance contributions, your employer’s own contributions or contributions taken from your pay before it was taxed.

Reporting pension payments received

  • On page 3 of the SA100 tax return, you complete boxes 8 to 12 to provide details of gross UK pensions and annuities received, including lump sums, whether State Pension or private pension.
  • In the State Pension box, you enter the amount you were entitled to receive in the year. You must also detail “any tax taken off” amounts you’ve received.
  • Your pension provider will give you a P60, ‘End of Year Certificate’ or similar statement, which will help when it comes time to fill in your tax return. You add up your total UK retirement annuities and pensions and put the total gross amount (“before tax taken off”) in box 11.
  • In ‘Any other information’ on page 7 of your tax return you should include: details of your pension or annuity payer and your reference number; your PAYE reference (if relevant) and the payment before tax and the amount of tax taken off.
  • Using tax return software can help to ensure that you enter the right pension-related information in the right places within your tax return, which can prevent costly errors.

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.

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