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Tuesday, 2 October 2023

Just about to retire – what you need to do

Immediately before you reach your State Pension age there are some steps you need to take. Find out how to make sure you get the State Pension and benefits you're entitled to.

State Pension age increases

The State Pension age is increasing. To find out more see 'Calculating your State Pension age'.

Claiming your State Pension

Four months before you reach State Pension age, The Pension Service will write to you. The letter will tell you if you need to claim your State Pension. If you are getting certain social security benefits you may not need to claim.

Find out what you need to do if you haven’t been contacted when you’re three months from your State Pension age. See ‘Claiming the State Pension’ for more information.

Claim the Winter Fuel Payment

If you were born on or before 5 July 1951, you could be entitled to a Winter Fuel Payment for winter 2012/13.

Apply for Pension Credit if you are on a low income

Pension Credit guarantees those living in Great Britain, who have reached the minimum qualifying age, a minimum weekly income of:

  • £147.70 if you are single
  • £217.90 if you have a partner

These amounts may be higher if you're severely disabled, a carer or have certain housing costs. The age from which you may get Pension Credit is changing. To find out more about Pension Credit see 'Pension Credit - an introduction'

Cold Weather Payments

Cold Weather Payments can help people who receive certain benefits and are paid during periods of very cold weather to help with extra heating costs. They are paid automatically so you don't need to claim them.

Other benefits you may be entitled to

Depending on your circumstances, you may be entitled to other benefits when you retire, such as Housing Benefit and Council Tax Benefit.

Notifying your Tax Office

HMRC need to know about your income when you retire or reach State Pension age so that they can make sure you:

  • receive the right tax-free allowances
  • pay the right amount of tax
  • stop paying National Insurance contributions

If you're a woman, and reach State Pension age before your 65th birthday, you'll also need to tell HMRC what your income is again when you're 65.

Receiving and completing form P161 Age-related Personal Allowance

It's very important that when you receive your Age-related Personal Allowance form (P161), you fill it in and return it. If you don't return it, you might pay too much tax. You could end up paying too much tax on your pension income, savings and interest.

If you don't receive the Age-related Personal Allowance form (P161) within a month before your 65th birthday, you can download the form below. Complete the form and return it to your Tax Office. Alternatively, you can contact your Tax Office and ask them to send you one.

National Insurance contributions at State Pension age

Once you're over State Pension age you don't have to pay Class 1 or Class 2 National Insurance contributions if you carry on working. You'll only have to pay them on any earnings that were due to be paid to you before you reached State Pension age.

However if you're self-employed you may still have to pay Class 4 National Insurance contributions after you reach State Pension age. This is because they're an annual charge. This means you may still have to pay them on any taxable profits for the year in which you reach State Pension age.

Your pensions and tax

State Pension is paid to you without any tax taken off, whereas other pensions are normally taxed before you receive them. The Tax Office will be told by pension providers and the Department for Work and Pensions how much you're receiving of each type of pension and when payments began. If you're a taxpayer you'll need to pay tax on your State Pension. If you're not you may be due a refund of tax on other pensions.

Self assessment and claiming Pension Credit

If you are a self assessment taxpayer and are considering claiming Pension Credit, see ‘Income, benefits and Pension Credit’ for more information.

Company and personal pension

Your company or personal pension will have rules about when you can retire and take your pension. Contact the administrators of your company or personal pension to find out when you can get your pension.

Trace a company or personal pension

If you have lost the contact details of your pension scheme and need help, then the Pension Tracing Service may be able to assist.

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