What about tax?

What tax do I pay?

Just because you are no longer working doesn't necessarily mean that you don't have to pay tax any more. How much tax you pay depends very much on your personal circumstances and the tax rules in place throughout your retirement. Please remember that tax rules can change. You should talk to your financial adviser about your personal situation.

How is my retirement income taxed?

Almost everyone in the UK has a personal allowance. If your total income is below that level, you won't pay tax on it. However, if your income is more than your personal allowance, you will pay tax on your pension income under PAYE rules just as you did when you were working. We deduct tax from your income before we pay the money into your account.

If you have any tax queries or would like to find out more, you can go to the HM Revenue & Customs website: www.hmrc.gov.uk

Preparing your legacy

It's a good idea to make arrangements to leave your money and possessions to the people that you care about. If you die without making a will, it may mean that your estate may not go to the people you'd expect to receive it. Find out more about what to do at our page on preparing your legacy.

Get help from an expert

We strongly recommend that you talk to a financial adviser about your tax situation. They can help you plan ahead and make the most of any tax breaks available to you. If you don't have an adviser, you can visit www.unbiased.co.uk or call us on 0800 068 4076. We can only advise on our own products.

Related FAQs

What is the inheritance tax threshold?: The inheritance tax threshold for 2011/2012 and 2012/2013 is £325,000 for a single person. Married couples and civil partners can pass property tax-free to their surviving partner when they die. When the second partner dies, their executors or representatives can also use their late partner’s inheritance tax allowance, so long as it wasn’t used when the first partner died. In the best case scenario, people who are married or in a civil partnership can leave as much as £650,000 after the second partner dies before inheritance tax is due. Tax rules may change in the future.

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