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  • RE: Tax on state pension and work pensions in the first year of retirement

    My tax code notice under "This is how we worked out your tax code(s)" states that my Personal Allowance is £12 570, then Less State Pension of £10 244 Go to Note 2. Note 2 explains that the tax on the state pension is taken via reduction in the Personal Allowance and then states "We have reduced your tax-free amount by the estimated amount of pension we think you will receive this year". However I only receive 6 months State Pension in this tax year, the estimate should say £5 122. It appears that others above have the same query and I may be daft but I don't understand the response that the code is only an emergency code and only 1/12 per month will be taken. Must be old age but could you attempt again to explain what this means. Many thanks.