There is still time to pay less tax on retirement income

keep being invested and could be worth more when you do take it.

DEFER YOUR STATE PENSION You could look at deferring your state pension, particularly if you are still working. For each nine weeks you defer, you will get an extra 1pc when you do claim it. If you pay income tax at 45pc, claiming your state pension now will mean it is taxed at this rate.

If you wait until you have stopped working, your income could drop and you will pay less tax. In the meantime, your state pension payments are building up for when you do claim.

SALARY SACRIFICE

If you are still working, salary sacrifice is a way of reducing your income for non- cash benefits. You could do this with a range of options including pension contributions, one- off purchases and travel. Crucially, by earning less money, you pay less tax.

However, if you have already taken income from any private pension, there are tax implications.

REMEMBER PENSION SAVINGS CAN BE PASSED TO YOUR LOVED ONES TAX-FREE

Pensions, unlike Isas, generally do not form part of your estate when you die, so inheritance tax is not normally payable.

If you die before your 75th birthday, and it’s paid to your loved ones within two years, they also won’t need to pay income tax on it. This means if you have a pension you don’t yet need, you could avoid ever paying tax on it by leaving it as an inheritance. If you die after the age 75, or it’s accessed after more than two years, inheritance tax still will not be due, but income tax will be at the marginal rate of whoever inherits it.

THE MARRIAGE ALLOWANCE If you earn less than £12,570 and have a spouse or civil partner who earns more, you can pass £ 1,260 of your tax-free allowance to them. If you earn less than £11,310, that could save your household £252 in tax. Owing to the latest increase, anyone getting the full state pension will now exceed that amount, meaning you lose £192 of the tax-free allowance you could pass on – costing you an extra £38 a year.