Understanding How Tax Affects You In Retirement
Your scheme provides good tax benefits for you while you are building up your pension - all your contributions receive tax relief at the highest rate you pay, returns on investments (i.e. investment income) are not subject to tax and, when you retire, you may take a tax-free cash lump sum within certain limits. However, because you receive these advantages, when you start receiving your pension, it is subject to income tax just as your salary was when you were working.

Indeed, your tax situation may become a bit more complicated if you have different types of income from a variety of sources - savings, sale of property, various pension schemes, insurance policies that have matured or unit trusts, and so on.

You will be taxed under an emergency coding until our tax office sends you a form to register other income. This may take up to three months. You are responsible for completing the form to ensure your own tax coding is correct. As soon as you retire, you should let your tax office (see below) know your date of birth (so that they can give you the correct allowances) and how much your State pension  is and the date you will start getting it. If you don't know these details you can always find out by contacting us.

The tax you pay depends on your taxable income in the tax year and includes:

• Your state retirement (old age) pension
• Private pensions and AVCs
• Gross interest from a bank or building society.
• Dividends from shares and UK authorised unit trusts
• Any earnings from a job or business
• Income from property.

This is not an exhaustive list and you can check the HMRC website for a complete and up-to-date picture. If you want more information about tax allowances and rates, you can get current details and further useful information by visiting the pensioner section of the HMRC website.


Tax office details

HMRC, Pay as you Earn Centre, PO Box 1970, Liverpool L75 1WX
 
Telephone for pensioner enquiries 0845 300 0627 (if calling from abroad +44 135 535 9022)

BAE Systems Pension Scheme pensioners should quote reference number 083/B7A
ROPS pensioners should quote reference number 083/VA28316 
2000 Plan pensioners should quote reference number 567/B5027

Alvis Pension Scheme pensioners should contact
HMRC, Centre 1, East Kilbride, Glasgow G79 1AA 
Telephone for pensioner enquiries 0845 0703703
Please quote reference number 961/1704808