Pension rules at 75: tax relief on new contributions stops and most death benefits become taxable income. Here is what else changes.
Turning 75 does not shut a pension under the tax rules: HMRC confirms you can still pay in. The big changes are to tax on payments in and on what your beneficiaries pay if you die, though some plans set their own age-75 deadlines too. For a neutral walk through your options, Pension Wise offers a free appointment (what Pension Wise is), open to anyone 50 or over with a UK defined contribution pension. Contributions, income and inheritance can pull against each other at 75. If yours do, an FCA-authorised adviser rings you for a chat that costs nothing, after you have submitted this page's form.
What changes for your pension at 75?
Two tax rules matter most at 75. Money paid in after your 75th birthday no longer earns tax relief, and a pot left to someone else is taxed differently when its owner dies at 75 or over. The rest of this guide takes those in turn, then covers drawdown, annuities and tax-free cash, where the limits come from allowances and from your plan's own terms.
- Paying in: still possible, but without relief.
- Drawdown and annuity income: taxed as income, as at any age.
- Tax-free cash: capped by the lump sum allowance, which took over from the lifetime allowance.
- Death benefits: dying at 75 or over is where the tax differences begin.
- Inheritance tax: a separate change from 6 April 2027 that turns on the date of death, not age.
Can you still pay into a pension after 75?
Yes, but not with tax relief. HMRC's Pensions Tax Manual says: "Although contributions can be paid after a member has reached the age of 75, they are not relievable pension contributions and cannot qualify for tax relief." The statute behind it is section 188 of the Finance Act 2004, which excludes "any contributions paid after the individual has reached the age of 75".
A payment into a SIPP or personal pension after your birthday therefore goes in without relief. Whether your provider takes new payments from a member over 75 is for the provider to say. Employer payments, the date a payment counts and the annual allowance each get their own treatment in the guide to tax relief after 75; the earlier rules are in the pension tax relief guide.
Pension drawdown, SIPPs and annuities after 75
Pension income you take is added to your other income and taxed on the usual bands. GOV.UK lists a private pension among the income that counts, with tax due only on the part of your total taxable income above the Personal Allowance (£12,570 is the usual figure). In Scotland, Scottish Income Tax applies to pension income too, at rates that differ from the rest of the UK.
MoneyHelper describes flexi-access drawdown as letting you "take your money when and how you choose", with the remainder staying invested, and says you can later convert some or all of the pot into guaranteed income, for life or for a fixed period. An annuity bought for life is covered in the annuity guide, and the mechanics of drawdown in the drawdown guide and the SIPP guide.
Pension money left in drawdown remains exposed to markets, and investments held there can fall in value as well as rise, so the amount you receive may be lower than the amount paid in. Drawdown can be revisited: MoneyHelper says you may later choose another way to take money that sits in drawdown. An annuity usually cannot be unpicked once its cooling-off window has closed. Plan terms can bite at 75 as well. Scottish Widows, for example, says: "Some of our pension plans need you to take retirement benefits or transfer to another plan by the age of 75." If you are unsure whether your own plan has a deadline like that, an adviser can talk it through free once you send the form.
Can you still take tax-free cash after 75?
The tax limit on tax-free cash is an allowance. GOV.UK says "You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is £268,275." That is the lump sum allowance. MoneyHelper adds that drawdown usually lets you take up to 25% tax-free "at any time from age 55 (rising to 57 from April 2028)". Whether your own plan still pays tax-free cash once you are 75 is set by its terms, so check them before the birthday.
GOV.UK dates the end of the lifetime allowance to 6 April 2024; two allowances now do its job. Before that date, reaching 75 could itself crystallise amounts against the lifetime allowance, which HMRC's manual refers to as benefit crystallisation events 5, 5A and 5B. HMRC now describes the checks as happening when you become entitled to a lump sum, or when a lump sum death benefit is paid in respect of you. A lump sum above them is taxed: "If you take a lump sum that goes above your allowances, you’ll need to pay Income Tax on the extra amount." Anyone holding a protection may have a larger figure.
Taking a quarter of a large pot is hard to undo, and it uses allowance that would otherwise count for your family. Close to the allowance? An FCA-authorised adviser can weigh tax-free cash against inheritance for you, and you reach one through the quote form here.
The lump sum and death benefit allowance test
The larger allowance, £1,073,100 according to GOV.UK, counts a serious ill-health lump sum and "certain lump sum death benefits paid to your beneficiaries". A lump sum that counts against the lump sum allowance counts against this one as well.
HMRC's manual sets out how the test runs after a death. The deceased member's allowance, not the recipient's, is the yardstick, measured "immediately before they are paid" once the member's own lump sums in life and any death benefits already paid have been taken off. Whatever exceeds the balance is taxed at the recipient's marginal rate. This test is about deaths before 75. On telling HMRC that death benefits went over the allowance, GOV.UK says: "This only applies if the person who died was under 75." At 75 or over, its table shows Income Tax deducted from most lump sums anyway. So tax-free cash you take reduces what your beneficiaries could receive tax-free only if you die before your 75th birthday. The lump sum and death benefit allowance guide goes through it step by step.
Who pays tax on a pension left behind at 75 or over?
This is where age 75 matters most. GOV.UK's inherited pension guide ties the tax to three things: the kind of payment, the kind of pot and the owner's age at death. Where the owner died under 75, most lump sums are tax-free up to their lump sum and death benefit allowance, though GOV.UK adds that Income Tax can apply when the provider pays it over two years after learning of the death. Where they died at 75 or over, GOV.UK shows "Income Tax deducted by the provider". The 75-or-over row is the same for an annuity or drawdown fund from a defined contribution pot.
Dig into HMRC's manual and the picture is consistent. An uncrystallised funds lump sum is taxable if the member "was 75 or older when they died", as income of the recipient unless it goes to what HMRC calls a non-qualifying person, such as a trustee or personal representative, which brings in a special charge. A beneficiary's annuity is taxed at the recipient's marginal rate where the person who died was 75 or older. Who can inherit, and how, is in how pension death benefits work; the tax is in inherited pension tax, and employer schemes in workplace pension death benefits.
A separate change is coming whatever the age. HMRC says most unused pension funds and pension death benefits will be brought into the estate for inheritance tax, and section 71 of the Finance Act 2026 applies the amendments in sections 66 to 70 to deaths on or after 6 April 2027.
Four things to settle in the year you turn 75
- Whether to keep paying in. Without relief, a payment is simply your own money going into a pension, so compare it with other places the money could go.
- Who is nominated. GOV.UK says the person who died "will usually have nominated" the beneficiary, meaning they told their pension provider to pay that person. A nomination is out of date if your family has changed.
- How tax-free cash and the death benefit allowance interact. Anything counted against the lump sum allowance also counts against the death benefit allowance, so a large lump sum taken now leaves less tax-free room for your beneficiaries, but only if you die before 75.
- What your family would pay. At 75 or over, those who inherit a defined contribution pot usually pay Income Tax on what they receive, and from April 2027 inheritance tax may apply as well.
Pension Wise, which MoneyHelper describes as covering when you can access your pots, the ways to take money and how each is usually taxed, is a free place to start on the third.
Where the rules differ: public-sector schemes and Scotland
The tax rules above come from HMRC and apply to registered pension schemes. What a defined benefit scheme such as Teachers' Pension pays, and to whom, is set by the scheme's own rules, and Teachers' Pension death benefits has its own guide. Scotland has its own income tax rates and some separate public-sector schemes. UK rules also say nothing about the tax position in another country, so anyone living abroad needs advice where they live.
Questions people ask about pensions at 75
Is my pension pot treated differently once I turn 75?
For tax, the changes covered here are to new contributions, death benefits and a serious ill-health lump sum. Your plan can add its own age-75 rules, as the Scottish Widows example shows, and your provider can confirm what yours says.
Is drawdown income taxed more heavily over 75?
GOV.UK treats pension income as part of your total taxable income, with tax due on the part above the Personal Allowance. Scottish taxpayers use the Scottish bands.
Does 75 matter for a serious ill-health lump sum?
It does. HMRC's manual says a serious ill-health lump sum paid to a member who has reached 75 "is taxed as pension income (at marginal rates) of the recipient member", whereas there is no income tax charge for an under-75 within the permitted maximum.
Does the April 2027 inheritance tax change depend on my age?
The commencement section turns on the date of death. HMRC's technical note adds that if the member dies before 6 April 2027, "the current rules will apply even if pension benefits are paid to their beneficiaries after this date".
What about a Teachers' Pension at 75?
The scheme's own rules decide. According to GOV.UK, a defined benefit pension can usually only be paid to a dependant of the person who died.
Settling your plan for the 75th year
Seventy-five is a fair moment to treat paying in, taking income and leaving money behind as one plan. An FCA-authorised adviser covers all three on a single free call, booked by sending this page's form. Your provider and Pension Wise are open to you as well. For the wider timeline, see taking your pension from 55.