How much tax will I pay on my pension?

Pension income is taxed like any other income: nothing on the first £12,570, 20% to £50,270, 40% to £125,140, 45% above (Scottish bands differ). The State Pension is paid without deduction but uses up most of the allowance, so a full State Pension of £12,548 plus £18,000 of private pension pays about £3,600 a year: all of it deducted from the private pension through PAYE.

Is the State Pension taxable?

Yes, it is taxable income, but no tax is deducted from it. HMRC reduces the tax code on your other pension or earnings to collect the tax due on the State Pension. With no other income, a State Pension below the personal allowance leaves nothing to pay.

Is the 25% tax-free lump sum counted as income?

No. Tax-free cash is not income and does not use up the personal allowance, though the tax-free part of a UFPLS or a lump sum is limited to 25% and the £268,275 lump sum allowance. Only the taxable 75% of a withdrawal enters this calculation.

Pension income tax calculator: how much of your retirement income is tax?

State Pension, private pensions and anything else taxable, at the current bands with the State Pension using the allowance first as HMRC’s coding does: the tax, the take-home, the split by source and your marginal rate. Your figures never leave your browser.

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Worked example

Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.

Inputs
State Pension	£12,548
Private pension income (gross)	£18,000
Other taxable income	£0
Tax residence	England, Wales or N. Ireland

Results
Gross retirement income	£30,548
Personal allowance used by the State Pension	£12,548
Income tax a year	£3,596
After tax	£26,952 a year, £2,246 a month
Marginal rate on the next £1	20%

The next question

Would an emergency tax code catch my first withdrawal? →Pension emergency tax calculator

Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.

Read the guides

Deferring your State Pension: the honest breakeven →
The permanent ~5.8% a year uplift for waiting, the income you give up, the roughly age-83 breakeven, and the tax angle that often matters more: the statutory mechanics, worked through honestly.
Which account to spend first in retirement →
ISA, pension, general account: the order you draw them decides how much tax retirement pays. The mechanics of filling the personal allowance, the GIA-first doctrine, and how April 2027 rewrites the classic advice.
Drawing retirement income as a couple: the coordination dividend →
Two personal allowances, two basic-rate bands, tax-free transfers between spouses: why the same household income can cost thousands less when drawn as a couple, and how Hundred Summers computes the split.
What a defined benefit pension is actually worth →
NHS, teachers, civil service, old company schemes: why £10,000/yr of DB pension is worth more than most people's entire DC pot, how to compare added-pension offers, and why transferring out is almost always wrong.
The first pension withdrawal: emergency tax and how to avoid it →
Why a first flexible withdrawal is over-taxed on a month-1 code, a worked £30,000 example, the three reclaim forms, the small-first-payment trick and the case for spreading withdrawals across tax years.

How retirement income is taxed

There is no separate pensioner tax system: retirement income goes through the same bands as a salary. What differs is the plumbing. The State Pension is paid gross and HMRC collects the tax on it by lowering the code on your private pension, so the private pension’s payslip carries the tax for both. Tax-free cash is not income. A first flexible withdrawal is usually over-taxed on an emergency code and reclaimed later. And because each person has their own allowance and bands, a couple who split retirement income evenly pays less tax than one who does not: the couples guide and the app’s Household tab work that through.

From gross to a lifestyle

The after-tax figure is the one that matters, and the Retirement Living Standards checker places it against the Pensions UK benchmarks for one or two people. Whether the money lasts is the drawdown calculator’s question, and the full plan runs every year of it with the tax computed year by year.

Education, not advice. Current bands from the Hundred Summers engine; tax codes, underpayments carried forward and the taper of the personal allowance above £100,000 can move the in-year figure. For a personal recommendation speak to an FCA-regulated financial adviser; free impartial guidance is available from MoneyHelper.

Sources

HMRC, Income Tax rates and Personal Allowances; Scottish rates from gov.uk.
HMRC, Tax when you get a pension.
Full new State Pension: gov.uk.