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Saturday, 9 October 2010

Why it's important to fill in your Pension Coding form

When you're nearing State Pension age you'll receive form 'Pension Coding' (P161) that asks for details of your age and income, including pension income. It's very important that you complete and return this. However if you're self-employed you won't automatically receive the form - you'll need to request it from your Tax Office or download one.

Why and when you get a Pension Coding form P161

HM Revenue & Customs (HMRC) sends you form P161 so that they can work out what tax-free allowances you're entitled to and how much tax (if any) you should be paying when you start to get your pension income. If you don't fill in and return the form your employer or pension payer might have your tax code wrong and you could pay too much tax.

Provided HMRC has your date of birth on record, they automatically send you the form the month before you reach State Pension age. Note that this is different from a letter you will receive from The Pension Service asking you to claim or defer your State Pension.

If you're within a month of reaching State Pension age and haven't received a form you can download a copy below, print it off and fill it in before returning it to your Tax Office.

If you're self-employed you won't automatically get form P161 sent to you. You can download it or you can request it from your Tax Office.

If you are unable to download a form please contact your Tax Office.

HMRC also re-sends the P161 to you if you're a woman approaching your 65th birthday. This is to check if your circumstances have changed. 

Filling in form P161

Your State Pension


You'll need to tell HMRC:

  • whether or not you've decided to take up your State Pension now or wait until later (deferral) 
  • the date you expect payments to start 
  • the expected weekly amount you will receive

Other pensions

You'll need to give details of any company pension or personal pensions you're receiving or expect to receive soon.

If your pension has started, you'll find the pension number (sometimes called the 'pension annuity number') on your pension payslips or on letters from your pension provider.

If your pension hasn't started you must write 'Not yet started' next to 'Pension number' and enter the date you expect it to start next to 'Date pension started'.

Earnings from employment or self-employment

If you're still employed, you'll need to tell HMRC how much income you're getting.

If you're self-employed, write 'See Self Assessment tax return' where it asks you to complete your monthly or weekly pay. HMRC will know your income once they receive your tax return after the end of the tax year.

Income from taxable benefits

You'll need to tell HMRC the full amount of any Jobseeker's Allowance you get (this counts as taxable income) and the amount of taxable Incapacity Benefit you get. You only pay tax on Incapacity Benefit after you've been getting it for 28 weeks. HMRC will be able to see from the date when it started how much, if any, is taxable.

Other taxable income and gifts to charity


When filling in these sections, remember:

  • only give details of your income for the last tax year, ie from 6 April to 5 April
  • ignore income that isn't taxable (see link below)
  • show only half of any income you get in joint names, such as interest on a joint bank account

If you've sent a tax return to HMRC for the last tax year, you don't need to fill in the above sections. Just fill in the box asking for your ten-figure tax reference - you'll find this on the front of your tax return.

Returning the form

Remember to sign and date your form and send it back to HMRC as soon as possible, using the reply envelope that is sent with it. If you've downloaded a form from this website, send it to your Tax Office. 

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