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Will I pay tax?

Although lump sums are paid tax free, your monthly pension payments are taxable.

When you first start to receive your pension, your tax deduction will depend on whether we have been provided with your P45.  If we have the relevant parts we will use the tax code specified. If we do not have your P45 then a basic rate tax code will be applied (currently 20% for normal rate tax payers).

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The code specified on your P45 will be used until HMRC notify us of the tax code you should be on, which we will apply to your monthly pension.

Until we receive the tax code notification it may take a little while for your pension to settle into a fixed regular amount. You will not receive a payslip every month on the pensioner payroll, however if your pension differs from the previous month by more than £5, this will generate a payslip.

If when we receive the tax code notification, you have underpaid or overpaid tax, your pension will be adjusted accordingly and any under or overpayment will be rectified.

If you have any questions about your tax code or how much tax you are paying, the Cornwall Pension Fund will not be able to help, you should contact HM Revenue and Customs (HMRC), using the details below:

Telephone: 0300 200 3300

Website: https://www.gov.uk/tax-codes

PAYE reference: 470/T51230

Our Jargon Buster may help with pensions terminology.