Do you have to notify HMRC when you retire?

Yes, you generally need to notify HM Revenue & Customs (HMRC) when you retire to update your tax code and avoid paying too much tax, even though your employer or pension provider usually tells them; it's crucial if you're self-employed to stop Self Assessment and end trading. You can do this online via GOV.UK, by phone, or by post, providing your National Insurance number to update your details for new pension income or ending employment.

How do I contact HMRC about my retirement?

There are several ways pensioners contact HMRC Income Tax, depending on your preference and the complexity of your issue. The main options are: Phone: You can call HMRC on their Income Tax helpline at 0300 200 3300. The phone lines are open Monday to Friday, 8am to 6pm.

Do you have to declare when you retire?

Tax in retirement. Most people will still need to pay tax when they retire. So you'll continue to get an annual tax code and pay tax on any income you receive over your personal allowance.

Do I need to fill in a tax return when I retire?

You'll also need to complete a return if you have other untaxed income streams — for example, rental income, dividends on shares or investments, or interest payments from deposit and savings accounts that are above the personal savings allowance.

Do you have to announce your retirement?

Announcing your retirement a few months in advance is often considered a courtesy to your company. Not only does it give your employer time to manage the transition and hire a replacement, but it also gives you plenty of time to get your personal finances in order.

HMRC Update for Retirees | New Tax Charges 2026 | What Pensioners Need to Know

Who do I notify when I retire?

HMRC needs 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.

What is the first thing I should do when I retire?

Meet with a financial adviser

Now is an opportune time to sit down with a financial planner who can help you establish good money habits in retirement. A financial pro can also be a good sounding board if you're experiencing any retirement fears.

Do you pay tax and NI when you retire?

You do not pay National Insurance after you reach State Pension age - unless you're self-employed and pay Class 4 contributions. You stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age.

How much can you earn without declaring it to HMRC?

You can generally earn up to £1,000 in a tax year from self-employment or property income (Trading Allowance) without declaring it to HMRC, thanks to the Trading Allowance. However, if you have other untaxed income (like tips or renting) exceeding £2,500, or if your total self-employment income goes over £1,000, you must report it via Self Assessment. It's crucial to track all income, as platforms might not deduct fees before reporting, and you're responsible for knowing your limits, with penalties for non-declaration.

Will my State Pension be reduced if I have a private pension?

No, having a private pension generally won't reduce your State Pension, as they are separate, but you might get less State Pension if you were "contracted out" of the Additional State Pension (SERPs) before 2016, paying lower National Insurance (NI) contributions into a private scheme instead. Being contracted out means you paid less NI, so your State Pension is lower, but the money went into your private fund. Your private pension's value won't affect your State Pension entitlement itself, but taking money from it can affect means-tested benefits.

What is the 3 rule for retirement?

The "3 rule" in retirement usually refers to the 3% Rule, a conservative guideline suggesting you withdraw 3% of your portfolio in the first year of retirement (adjusted for inflation annually) to make savings last longer, especially for early retirees or those leaving an inheritance, contrasting with the more common but riskier 4% rule. Another "rule of thirds" strategy splits savings into an annuity, growth investments, and a cash cushion. The core idea behind these rules is to find a sustainable spending rate to preserve capital over a long retirement. 

Do I pay tax on my savings when I retire?

Paying tax on savings when retired

The amount of tax depends on your total income. Usually, the first 25% of your pension is tax-free. The remaining 75% is taxed. Your Personal Savings Allowance still applies in retirement.

When I retire, what do I do with my P45?

The amount they can reclaim depends on their total earnings and tax contributions during the tax year. For those transitioning into retirement, a P45 should be passed on to pension providers to ensure that tax is calculated correctly on withdrawals.

What do I need to do when I retire?

Getting your finances in order

1. Claiming your State Pension. You won't normally receive your State Pension automatically. ...
2. Using your pension pot. ...
3. Tracing old pensions. ...
4. Dealing with your debts. ...
5. Boost your retirement income. ...
6. Preparing emotionally to retire.

Do you have to give notice when you retire in the UK?

Giving and withdrawing notice

In most jobs, an employer cannot force a worker to retire if they do not want to. However, if a worker has given their employer formal notice of their intention to retire on a certain date, the employer does not have to let them withdraw their notice.

Do I need to complete a tax return if I am retired?

For many years pensioners with a single source of income, being their state pension, have been required to complete a self-assessment tax return if their income is over their personal allowance, which may be the case if their basic state pension is enhanced by the state second pension.

How much can a retired person earn before tax?

How much income tax should I be paying? We all have a personal tax-free allowance representing the amount of income you can receive before paying tax. For 2024/25, the Standard Personal Allowance is £12,570. This means that you can earn or receive up to £12,570 and not pay any tax.

What is a good retirement income?

A common starting point is to estimate that you'll need about 70% to 80% of your pre-retirement income to maintain your standard of living in retirement. For example, if you earn $150,000 annually while working, you might need between $105,000 to $120,000 as a starting point in retirement.

Do I stop paying NI at 66?

Even if you're still working, when you reach State Pension age you usually stop paying National Insurance contributions.

What are the biggest mistakes people make when retiring?

The top ten financial mistakes most people make after retirement are:

• 1) Not Changing Lifestyle After Retirement. ...
• 2) Failing to Move to More Conservative Investments. ...
• 3) Applying for Social Security Too Early. ...
• 4) Spending Too Much Money Too Soon. ...
• 5) Failure To Be Aware Of Frauds and Scams. ...
• 6) Cashing Out Pension Too Soon.

What do most retired people do all day?

Happy retirees often engage in intellectual activities such as reading, learning new skills, or delving into creative ventures like painting or writing. They also prioritize physical wellness through consistent exercise, whether it's walking, yoga, or even team sports like Pickleball.