Just like a salary, your regular pension payments from the Plan are subject to income tax.
Tax is deducted from each payment by the Plan administrator, Mercer, based on the tax code provided by HM Revenue & Customs.
When you first retire, Mercer will probably start paying your pension before HM Revenue & Customs has provided your personal tax code.
That means they’ll deduct tax based on the current single person’s tax allowance. When they receive your tax code from HM Revenue & Customs, you may find that your net pension payment changes. If in doubt about this, make sure you contact Mercer to make sure everything is as it should be.
If you have a query about the taxation of your pension specifically, you should contact HM Revenue & Customs using the following details and stating the reference 068/VZ41677:
Write to: Pay As You Earn, HM Revenue and Customs, BX9 1AS
Call: 0300 200 3300
If you live overseas, you may not be subject to UK income tax, but Mercer is required to deduct it unless HM Revenue & Customs advises otherwise.
If you have a query about the taxation of your pension overseas you should call +44 135 535 9022 or visit the HM Revenue & Customs website stating the reference 068/VZ41677.