Your GMPF pension is a defined benefit pension (also known as a final salary or career average pension). This means you will be paid an income for life, which will be taxable as earnings.
The Standard Personal Allowance is £12,570 (for 2021/22). This means you’re able to earn or receive up to £12,570 in the 2021/22 tax year (6 April to 5 April) and not pay any tax. The Standard Personal Allowance will be frozen at this level until April 2026. If your pension is over the limit, you will pay 20 per cent income tax on everything from £12,571 to £50,000 before the higher tax rate is then applied.
As with a wage, we operate a PAYE system, so how much we deduct from your pension payment each month will depend on your tax code and whether you live in the UK or abroad.
You can see your tax code and the amount you’ve paid as tax over the year on the second page of your P60. The monthly amounts of tax we’ve deducted are also available to view on your payslips in your My Pension account. We receive all tax codes direct from HMRC, so if you think your tax code is incorrect then you need to speak to them. HMRC’s contact details and PAYE reference can be found on the first page of your P60 near your address. We are unable to change a tax code unless its come from HMRC.
You can find out more about tax on your pensions on the When and how we pay your pension page of our website.