Pension Frequently Asked Questions
If you reach State Pension age on or after 6 April 2016 and have at least 35 qualifying years of National Insurance contributions, you will receive the New State Pension, which currently pays £241.30 per week. This amount is reviewed and updated every tax year.
If you reached State Pension age before 6 April 2016 and had at least 30 qualifying years of National Insurance contributions, you will receive the Basic State Pension, which currently pays £184.90 per week. This amount is reviewed and updated every tax year.
To find out your personal State Pension forecast, you can use the Government checking system:
https://www.gov.uk/check-state-pension/
The forecast will tell you how much you could get and will also show your National Insurance record. The amount you receive may be higher or lower depending on your National Insurance record.
You can generally start accessing your personal and workplace pensions from a minimum age of 55, rising to 57 from April 2028. In some cases, you may be able to access your pension earlier, for example due to ill health or if you had a protected right before April 2006. To understand your specific circumstances, check the exact rules of your pension scheme or speak with your pension provider.
Income from personal or workplace pensions is usually taxable. Your pension provider typically deducts Income Tax automatically through the PAYE (Pay As You Earn) system, similar to how employers handle wages.
State Pension
The State Pension is also taxable, but no tax is taken off before you receive it. If you have other income, like a private pension, HMRC will usually adjust your tax code so the correct tax is collected from those payments.
If your State Pension is your only income and it’s below the personal allowance currently £12,570 for the 2026/27 tax year, you probably won’t pay any tax. (subject to change in future tax years)
Tax‑Free Lump Sum
You can usually take up to 25% of your defined contribution pension as a one‑off, tax‑free lump sum. This is know as the Pension Commencement Lump Sum (PCLS). The remaining 75% is taxed as income when you withdraw it.
Pension Credit
This state benefit is not taxable.
What happens to your pension when you die depends on the type of pension you have and your age at death.
When you die, your pension can be passed to your beneficiaries—such as a spouse, partner, or children—depending on the type of pension and your circumstances. Pensions are usually treated separately from your will.
Nominating beneficiaries
Use an expression of wish form with your pension provider to name who should receive your pension. If you don’t, the trustees decide, typically choosing a spouse, civil partner, or dependent children.
Types of pensions
Defined Benefit:
Often pays a survivor’s pension to eligible dependents, subject to scheme rules.
Defined Contribution:
Remaining funds can be paid as a lump sum, used to buy an annuity, or kept in drawdown.
What beneficiaries may receive
- Lump sum: Unused funds may be paid in one go
- Annuity: Joint life annuities continue payments to a partner; single life annuities usually stop unless there is a guarantee period
Tax implications
- Death before age 75: Typically tax‑free
- Death after age 75: Taxed at the beneficiary’s income tax rate
Future changes: tax rules are evolving, including changes affecting inheritance tax from 2027.
Check old documents: Look through past pension statements, payslips, or employment contracts from previous jobs.
Contact former employers: Reach out to HR or the pension administrator for information about the schemes you were part of. If the company has closed, try finding its successor via sources like Companies House.
Ask former colleagues: They may remember the pension provider or scheme details.
Use the government service: The free Pension Tracing Service can help you locate your pension provider’s contact information.
It’s common to have lost track of old pensions, particularly if you’ve changed jobs.
How it works: Each April, the State Pension rises by the highest of these three figures from the previous year:
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Average earnings growth: The increase in average wages from May to July.
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Inflation: Last September’s Consumer Price Index (CPI).
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2.5%: A guaranteed minimum increase.
The continuation of the Triple Lock is subject to government policy.
Yes, you can usually transfer your pension to another registered UK pension scheme, but there are important conditions. Defined contribution pensions can generally be transferred anytime before you start taking money, and sometimes even afterward—check with your provider. Some defined benefit and public sector schemes restrict or prohibit transfers.
There’s no single “right” amount to save for retirement, as it depends on lifestyle, income needs, and other retirement resources. This will be personal to you. There are many different calculations you can use to estimate how much you might need in retirement.
The Pensions and Lifetime Savings Association (PLSA) has created three tiers for retirement living standards in the UK, which can help set a target income. These figures are indicative and updated periodically:
Minimum: Covers all basic needs with a little left for fun (£14,400/year for a single person, £22,400 for a couple).
Moderate: Provides more financial security and flexibility, including an annual overseas holiday and eating out a couple of times a month (£31,700/year for a single person, £43,900 for a couple).
Comfortable: Allows for long-haul trips and other luxuries (£43,100/year for a single person, £59,000 for a couple).
Yes, you may have multiple pension pots that you have built up over the years with previous employers. You may also have a personal pension that you have contributed towards. There is no limit on the amount of pension pots you can have, however there is a limit on the amount you can contribute to your pensions each tax year. These limits include the annual allowance and may be affected by your income. Regulated advice can help you decide whether consolidating pensions is appropriate.
The performance of your investments is subject to risk(s). Its performance may fluctuate based on movements in the market and economic condition(s). Capital at risk. Currency movements may also affect the value of investments. You may get back less than you originally invested. Past performance is not a reliable indicator of the future performance. Tax treatment is based on individual’s unique circumstances.
