How Self Assessment works in retirement
When you retire, if you have workplace or private pensions, any tax you might need to pay will probably be handled through your pension provider.
But sometimes there may be circumstances that mean you may need to let us know about your income by doing a tax return. This is called a Self Assessment.
Here’s what you need to know about when to fill out a Self Assessment and how to do it.
You still get a tax-free Personal Allowance
Even after you’ve retired, most people are still allowed to get a certain amount of money each year without paying Income Tax on it. This is called your tax-free Personal Allowance.
The current standard tax-free Personal Allowance is £12,570 a year. So, if your total income is below your Personal Allowance, you won’t pay any Income Tax.
If your total income is higher than your Personal Allowance, you’ll only pay tax on that bit of money above it.
How is any tax you owe collected?
When you retire, we’ll try to collect tax you owe from any work or private pensions you have. We know how much State Pension you get, so we can make sure your other pension providers take off the right amount of tax before you’re paid. It all happens behind the scenes, so you don’t need to do a thing.
However, you may have other income that can’t be taxed automatically. This taxable income could be money you get from:
- investments
- renting out a property
- interest from savings
- self-employment
- selling something for profit
Selling something for a large profit is called making a ‘capital gain’. You can find out more about it on our Tax when you sell things in retirement page.
If your income from savings and investments is over £10,000, you’ll need to let us know by registering for Self Assessment and filling in a tax return each year.
You list all your income (as well as any allowable expenses and anything you’ve sold for a large profit) and return it to us. Then that helps us work out if you owe any tax – or whether you’ve paid too much and need a refund.
Will you need to do a tax return?
If you’re not sure whether you need to do a tax return, our free online tool on GOV.UK can help. Just answer a few questions and it’ll tell you if you need to fill one out.
Key thing to remember:
If you have income from other places besides your workplace or private pensions, or if your total income is over your Personal Allowance and there’s no other way to collect the tax, you may need to do a tax return.
Understanding if you need to do a tax return puts you in control. You can find out more on our Self Assessment page.
If you make money from property or self employment, the way you send us information about your income is changing. It’s called Making Tax Digital for Income Tax. For some people that change starts from April 2026. Our Making Tax Digital for Income Tax page has more information about what this means.
The information and resources on this site should help you get confident with the basics of tax, but you should always check the detailed guidance on GOV.UK for more help on doing your Self Assessment.