How Is My Pension Taxed If I Am Still Working in the UK?

Learn how your pension and salary combine to affect your UK income tax rates. Understand tax brackets and allowances for working pensioners.

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The amount of tax you’ll pay on your pension in the UK while still working depends on your total annual income, including your pension and job salary. Income tax rates for 2022/2023 range from 0% for incomes up to £12,570, to 45% for incomes over £150,000. Your pension income is added to your salary, and the sum is taxed according to these brackets. Use HM Revenue and Customs (HMRC) online tax calculator or consult a financial advisor for a precise calculation, considering personal allowances and any applicable reliefs.

FAQs & Answers

  1. Do I have to pay tax on my pension if I am still working? Yes, your pension income is combined with your salary and taxed according to your total income and UK income tax brackets.
  2. What are the UK income tax rates for pensions in 2022/2023? Income tax rates range from 0% on income up to £12,570 to 45% on income over £150,000, including combined earnings and pension income.
  3. How can I accurately calculate the tax on my pension while working? You can use the HMRC online tax calculator or consult a financial advisor to account for personal allowances and reliefs.

Watch More

For a deeper understanding of UK pension and taxation rules, explore our related videos on pension income strategies and how to maximize your tax allowances as a working pensioner.

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