Planning for retirement: a tax checklist
It is sensible to make sure you are prepared for the tax implications of retirement. Here we provide a useful checklist of things you might need to consider.
The following steps should be considered as you approach your pension age to help you plan for your future.
You might need to:
- confirm the date of your entitlement to the state pension by using the state pension age calculator;
- get a state pension statement which shows how much your state pension will be, if you decide to claim it when you are entitled;
- claim your state pension online, when the time comes to take your pension. You can also contact the Pension Service;
- consider whether to defer your state pension;
- check the tax position of any state pension lump sum (this only applies if you reached state pension age before 6 April 2016 and deferred claiming your state pension);
- consider whether your changed circumstances might entitle you to financial support, such as the following (we suggest getting in touch with a welfare benefits adviser to help you understand exactly what you can claim):
- pension credit – there is more information on GOV.UK (note that if you have a partner who is not also of state pension age, you might instead have to claim universal credit – revenuebenefits gives more information).
- council tax reduction: there is more information on GOV.UK;
- housing benefit: there is more information on GOV.UK;
- marriage allowance: there is more information in the tax basics section;
- winter fuel payment: there is more information on GOV.UK; or
- an older person’s bus pass: there is more information on GOV.UK.
- consider whether or not you could cash in your pension, although be aware that for tax reasons it might not always be a good idea to take it all out in one go;
- check whether you have the details of any workplace or private pension schemes that you have paid into. If you cannot find these, a tracing service is available. See GOV.UK for more information;
- check your National Insurance position if you intend to continue working;
- check your tax code and be aware of possible problems;
- consider the position if you intend to retire abroad;
- check what UK tax you might have to pay on any overseas pension.