Your LGPS pension is a taxable income, but any lump sum is paid tax free. The amount of tax that you pay on your pension depends on your income and your personal circumstances.

If we receive a P45, from the current financial year, with your retirement forms, we will operate the tax code stated on your P45, to calculate your retirement benefits. If we don’t receive a P45 or we receive it after we have processed your retirement benefits, then the tax code we operate will depend on which statement you select when completing your retirement claim forms, until we receive confirmation of your tax code from HMRC.

The retirement claim forms will contain the following options:

I have enclosed my P45 – we will operate the code on your P45

This pension will be my only income from the date my benefits are paid.

I have other income being paid as well as this pension.

If for any reason you prefer not to complete the tax section of your retirement claim forms, or if you have indicated that you have other income, then your first pension payment will be subject to a Basic Rate tax code. This means you will be taxed at 20% or 40% dependent on your gross pension.

If you have indicated that this pension will be your only source of income, we will apply the emergency tax code on a month 1 basis where income tax is assessed using 1/12th of the standard personal allowance.

HM Revenue and Customs Tax Office will then determine your tax code and send details to us. They calculate your tax code by assessing all your income due in the financial year. If after receiving your tax code from HMRC you are due a tax refund, this will be paid on the next available payroll on the last banking day of the month. (Please note HMRC must send a revised tax code on a ‘cumulative basis’ for a tax refund to generate in your pension payment).

HMRC can instruct us to update your tax code throughout the year which may result in a refund of tax paid or any arrears of tax due being collected.

South Yorkshire Pensions Authority cannot amend your tax code without instructions from HMRC and cannot contact the tax office on your behalf. If you disagree with a tax code that has been applied or would like further information on how it has been calculated, please contact HMRC as only they can review and make changes to your tax code.

Once your retirement calculations are complete you can check your current tax code by viewing your pension payslip through your online account mypension at mypension If you haven’t yet registered for the online account you will first need to register. You will need your National Insurance number and email address.

If you want to query the tax code that has been applied to your pension, please contact HMRC using the following contact details quoting tax reference 673/SY2 and your National Insurance number.

Telephone queries:
HM Revenue & Customs are open 8am-8pm Mon-Fri, 8am-4pm Saturday – 0300 200 3300