Does Part Time Work Affect Your Pension?

Author: Garry Crystal

Mrs Juli Murray asks

I am looking for a Saturday assistant. I have been approached by a gentleman who is retired and receiving a pension.

If I employ him will this affect his pension? He will be working 6 hours a week. He is worried about losing his pension if I take him on.

Working When Retired

While six hours per week may not seem likely to bring in a large income, and may not have a bearing on pension amount, it may make a change to actually paying tax. The main issue will be with taxable income, a figure that can change each year. Part-time work during retirement does still count as taxable income. The good news is that the tax-free allowance is usually higher when a person reaches retirement, meaning that you will be able to earn more before paying any tax. A person who is retired and claiming their state pension and then decides to resume work will need to work out whether or not the extra employment income will affect their tax free allowance. This can be done adding up all of your taxable income and then comparing this amount to the amount you are allowed to earn before paying tax.

Pension Income Tax Estimator

Estimate the income tax you will pay on your pension, including your personal allowance and the 25 percent tax-free lump sum, so you know what you will actually take home.

Try our Pension Income Tax Estimator free, here on this site →

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

Tax Free Allowance

There are numerous forms of income that are classed as taxable. Taxable income will include all state and occupational pensions, employment earnings, interest made from savings, money from benefits, some income from property, and income from various shares. However there are a number of income sources that are not taxable such as pension credit, premium bonds, certain benefits such as income supports and lump sum pension benefits. Tax free allowances will also include the basic personal allowance that is applicable to everyone and this limit does become higher the older you are. To work out if your part-time employment earnings will make a difference you will need to subtract your tax free allowance from your total taxable income including the new earnings from your part-time job. If there is money left once you have subtracted then you will need to pay some tax, if there is nothing left then you should not be paying any tax and may be entitled to a refund. Also bear in mind that there are certain allowances that can decrease your tax bill such as married couple’s allowance. Anyone who is working after retirement will also not have to pay any National Insurance Contributions. You can find more information on the tax free allowance from government offices such as the Department for Work and Pensions.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Pension Income Tax Estimator lets you estimate the income tax you will pay on your pension, including your personal allowance and the 25 percent tax-free lump sum, so you know what you will actually take home. Try it now →

85 questions

Ask Financing Retirement a Question

Sassy 23/02/2021 at 8:20 am

I want to employ a lady drawing a private an state pension on a casual basis ,how much can she earn before paying tax she is 68 years old .

Mac 13/10/2020 at 5:11 pm

I am on a NHS pension from my late husband's work. I live in a Council house and pay full rent and Council Tax. I've just been offered work 12 hours a week, will it affect my pension. I also have husband's Superan'.

Trisha 14/08/2020 at 10:36 pm

Im 66 and a widow and recieving state pension. I was recieving nearly full housing benefit. I have just started a job 16hrs a week. I paid £34 a week tax and also now haveto pay full rent and council tax. I am 21 pounds a week better off for working all those hours less my petrol money. Is it really worth trying to make a bit of extra money. Also tired out at the end of the week.

Ron 21/08/2019 at 11:22 pm

England is a shamefull place to live . Tha government does not want to see any one rise out of the gutter . That's why you can't work any extra hours whilst on the old age pension with out it effecting your pension . It's all about not letting anyone rise out of the gutter .

Molly 21/07/2019 at 10:54 am

Im 60 i work 30 hrs a week but finding it hard now as on my feet without a brk i want to go to 16hrs a week could i get any benefits and help with rent im not on any benefits now just my wage

Raj 05/05/2019 at 11:56 am

I want to know i am 55years of age been working all my life i work 25hours a week and live on rent i do not claim any benefite byt struggle every month looking at my money for paying bills i am never late paying bills can you telk me am i elgibile for any benefits please

John 23/03/2019 at 5:54 pm

My wife retired this march and we are getting pension credit, but I am 61 and have a casual job. I am working 10 hours some weeks and sometime less sometimes more. Is it okay if i work more hours some weeks as long as by the end of the year it adds up to 520 hours in the year.

Vic 12/01/2019 at 12:23 pm

If receiving pension tax credit and/or council tax benefit there seems to be an appalling lack of information as to the impact of any possible earnings on entitlement to such benefits.

The lack of clarity (in tandem with beaurocratic difficulties in coping with claims in changing circumstances) creates massive barriers and disincentives to anyone considering earning options, whether through hobby incomes, part time work...often inconsistent self employed work...or through rental income (also unreliable).

These problems appear to mirror the difficulties experienced by those currently at the mercy if universal credit.

Is there any realistic way to cast light on this issue? From a personal perspective I cannot afford to put myself at risk financially...so I am inhibited from trying to earn. (I ran saving down to zero before finally getting help to claim council tax benefit which turned out to be so complex a d ramified that I never want to go through the procedure again). If my feelings are representative of others across the nation it is a very sad reflection of the state of our country and does not sure well for our productivity.

Any clarity on these matters would be if help. Maybe a campaign is necessary to promote action and change?

Jay.Jay 14/12/2018 at 6:47 pm

I am 65 i get state pensions but can i go full time
can i still keep my my state pensions yes or no????

amuri 05/12/2018 at 9:45 am

I am 68 years old and have been offered a job at 12 hrs a week paying £99.this company wants me to go self employed which I feel is more for some one starting a small business.The question is how much income can I earn before tax and how do I let the tax office know that I am working with going self employed

Marty 04/12/2018 at 3:52 pm

I'm a pensioner (68) and took on some part time work for a total of 7 weeks 3 months ago (Sep) Because of this I have just been informed that my pension credit is being stopped. My question is this can I re-apply and if so how long do I have to wait. I have only my state pension to live on £112.00 a week....

arty 18/10/2018 at 6:34 pm

I am on Pension Credit. My hobby is art and occasionally I sell a painting. I do not make a profit as I buy materials. Do I have to register for self-assment?

Ninno 19/09/2018 at 1:35 pm

My husband is 67 and receives his pension and guaranteed pension credit and I am 62 and named on it but I want to know if I can go to work and how will it affect his pension,housing benefit council tax etc

Duff1 15/09/2018 at 1:03 pm

I am 67 years old and on a state pension and small NHS pension, which enables me to claim savings credit.

I own an old village house (renovation) which is up for sale(long story!) Housing benefit have said I have 26 weeks to sell then I will lose both my housing and saving credit benefits.
I have just been told, the house sale has fallen through, I am in a total panic as I will not be able to afford to pay my rent, council tax, bills and food, out of my pension alone. If that happens I could become homeless. Any advice very much appreciated.
Help!!!!!!

Karen 23/08/2018 at 6:43 pm

I receive the married couple allowance as my husband is a low earner. Will I lose this when he retires next year and claims old age pension? Thanks advance.

Harry 20/08/2018 at 9:52 am

I am retired in receipt of private pension, I do some casual work gardening when asked by a customer. Do I need to declare what I earn ie 20 to 40 pound a week at the most.

Herflick 14/07/2018 at 7:54 pm

My husband receives pensions credit. How many hours can I work with out claiming it. I'm not pension age yet.?

FinancingRetirement Editor 19/06/2018 at 11:39 am

You can choose to keep on working, whether paid or on a voluntary basis, while claiming your State Pension. Any money you earn will not affect your State Pension, but it may affect your entitlement to other benefits such as Pension Credit, Housing Benefit and Council Tax Reduction (help with your rates in Northern Ireland), It would be worth speaking to someone at Citizens Advice Bureau or the DWP to see what your best options are.

paul 18/06/2018 at 3:36 pm

I am 65 on 3rd july.2018. date given for state pension 06/03/2017. age then was 63years 8months and 3 days.I want to continue working.part time,I do 10 hours per week. I hav'nt intentionally defered my pension claim,so am a bit worried that because i get housing benefit i should inform pensions people.If they reduce my benefit I wil have to pay the difference,And i cannot afford to do this.what shall i do?

Maz 15/04/2018 at 2:59 pm

I am a pensioner claiming housing benefit, how much am I allowed to earn

FinancingRetirement Editor 06/03/2018 at 2:39 pm

You can see more via whichwhich should help answer your question.Our Response:You won’t usually pay any tax if your total annual income adds up to less than your annual tax personal allowance of £11,500. Any income earned over this amount is taxable.

FinancingRetirement Editor 06/03/2018 at 2:37 pm

You can see more via whichwhich should help answer your question.

liz 06/03/2018 at 12:58 pm

i am due to retire on the 6th of july and want to carry on working i work 20 hours a week on minimum wage what tax will have off is it worth carrying on i have no morgage or any other pensions

Mazza 28/12/2017 at 12:14 pm

I am 55yrs in march 2018...l can take my pension from my previous job of £6, 000 a year. I would still like to work part time. How much can l earn before the pension gets taxed. Thanks

Den 11/10/2017 at 5:20 am

I'm 67yrs pensioner, my state pension & 3 small occupational pensions.
I get small help with my housing & council tax benefit. I'm looking to work
part time, will it affect my housing & council tax benefit?

FinancingRetirement Editor 15/09/2017 at 2:41 pm

You are able to earn or receive up to £11,500 in 2017-18 tax year (April 6th to April 5th the next year) and not pay any tax. This is called your Personal Allowance. If you earn or receive less than this then you’re a non-taxpayer

Graham smail 12/09/2017 at 7:05 pm

If I was to retire at 60 and start using my civil service pension, can I do some part-time work without getting taxed,how many hours a week am I aloud to work.graham

Sammy 01/09/2017 at 10:58 am

I am 65 and my wife is 56 , I now get my state pension and is topped up with guaranteed pension credit to bring our money up to minimum amount for a couple, we also get our rent and council tax paid in full. My wife wants to get a part time job to enable us to go out occasionally because at the moment we have very little spare money. Will we be worse off if she works part time. Thank you . Sammy

Len c 11/08/2017 at 5:46 pm

If i worked between 25to 30 hrs a week how does this effect my state pension payment

FinancingRetirement Editor 23/06/2017 at 11:13 am

The standard Personal Allowance is £11,500, which is the amount of income you don’t have to pay tax on. If this additional wage will take you beyond this amount, then you would have register for self-assessment. But, you are not going to pay much tax on £520 per year. If this amount means that you are still earning below your annual tax allowance, you would not have to register for self-assesment and can do the work without fear of any repercussions from nosey neighbours or the like.

Squibbs 22/06/2017 at 12:13 pm

My elderly dads neighbour has asked for my help 1hr a week as she has cancer and can't manage to vacuum and mop the floors. I of course said yes but she wants to pay me. I myself am almost 71 and in receipt of a state pension plus a private pension. She suggested £10 a week but up until now I have refused as I,m afraid it could affect my tax payments. Someone has now made it their business to ask her what I do and we are both afraid we may get into trouble. X

FinancingRetirement Editor 19/06/2017 at 4:07 pm

Only if you earn over £11,500 per year, which is any amount over your annual personal tax allowance. It will not affect your pension, but you will be taxed on earnings over and above this amount.

Jenny 19/06/2017 at 12:50 pm

I am 66 and retired. I draw my state pension, but i receive a small pension from my last job. Altogether, these add up to £750.00 per month. I am thinking of taking a part time job. Will it affect my pension please?

FinancingRetirement Editor 14/03/2017 at 10:30 am

You can see more via the Age UK site here, which should tell you all you need to know.

Pearl 13/03/2017 at 8:16 am

When my husband retires next year on his state pension ,i will still be working 30hrs per week ,will my husband get help with rent etc

Fliss45 Editor 27/02/2017 at 2:29 pm

@babydoll - I'm sure you are not the only person who feels this way! In a few years we will all be working until we drop :(

babydoll 27/02/2017 at 1:04 pm

my pension is so bad i am considering going back to work

CF** Editor 15/02/2017 at 11:56 am

@Pat - Yes, and as long as your total earnings fall under your annual personal tax allowance you won't have to pay tax. Charlie

Pat 14/02/2017 at 1:46 pm

My fella is claiming a state pension for both of us I was wondering if I can get a partime job wld it effect our state pension atall plus we need help on how to get extra help on decorating plus need more furniture thanks pat cavannagh

Vickie 11/02/2017 at 6:01 pm

I am 55. Moving next year to coast. A
And want to cut my full time working hours to 30 hours per weeks. I have worked since I was 18 no. Gaps in 18 paying national insurance. Will I still be able to claim full pension. Or be allowed to top up?log

FinancingRetirement Editor 04/01/2017 at 1:47 pm

You are still eligible to claim your state and personal pension when you’re working past retirement age. You only pay income tax if your taxable income - including your private pension and state pension - is more than your tax-free allowance (the standard personal allowance for 2016-17 tax year is £11,000). Neither will you pay National Insurance after you reach state pension age - unless you’re self-employed and paying Class 4 contributions.

Tony 03/01/2017 at 5:43 pm

I'm getting a state pension & firms pension of £ 227 a month I'm 72 I've been offered a part time job working 10 hours a week & I was wondering if this would affect my pension & if it's worth taking the job many thanks a j jefferies

FinancingRetirement Editor 07/11/2016 at 11:11 am

The amount of Pension Credit you get may change if your income, capital or other circumstances change. If you are 65 or over an assessed income period may apply. If so you do not need to tell the Pension Service about every change in circumstances. The letter sent to you with the Pension Credit decision will tell you if an assessed income period applies to you. You will also have been sent an accompanying information sheet called Pension Credit 'what you need to tell us about'. It tells you about the changes you must report even if you do have an assessed income period. The Turn2Us website may also be able to help find out if your benefit will be affected, I hope this helps answer your question.

Trish 06/11/2016 at 4:11 pm

I am on pension credit and have been offered a job for one day a week. How much can I earn and not loose the benefit

Mop 20/09/2016 at 1:52 pm

I am in receipt of guaranteed pension credit, and I also get my rent and council tax paid. I have been offered a part-time job. How much benefit will I lose? I don't mind if it's only what I earn, I would prefer to pay my own way, but if I lose more than I earn (for example if they stop my housing benefit altogether, rather than just reducing it) I won't be able to manage. I live alone, I have no savings and some debt. I need an answer before I agree to take this job.

Kay 02/08/2016 at 1:36 pm

My sister's husband claims pension credit for them both. He is 67 and she is 62. He gives her no money what so ever.
She would like to get a part time job, how much can she earn before it affects his money
Please can you advise

kat 16/05/2016 at 2:20 pm

l am 58 and my husband on pension credit guaranteed, which is about £55 a work and no council tax to pay. l am thinking of getting a part time job of 12 hours. which will workout about £80. Will he lose all his benefits ?

blythespirit 10/03/2016 at 11:52 am

I am 67, receiving both state pension and credit guarantee..my only income.I want to work part time...how many hours may I work and how much can I earn before my benefits are affected by the part-time earnings.

FinancingRetirement Editor 23/02/2016 at 12:13 pm

You can see if you are eligible via the Turn2Us site here.

Smiller 22/02/2016 at 5:46 pm

I am 65 years old and my pensions are about 18000per year my wife is 54years of age and working 12 hours minimum wage a week can she claim any benefits/support

AnaisAnais 24/10/2015 at 11:18 pm

I have to say that reading the questions re whether a person should take up a job or whether they would be 'better off' continuing to get all the bennies they can get for ever more make me mad. Get a job where you can. Do what you can for yourself and contribute where you can. I do appreciate that in some cases this isn't possible due to extreme poor health but all those who think they'll just continue to take should be ashamed of themselves. Have a bit of pride in yourself and stop poncing - if you've been offered some work, take it.

Oldgit 15/10/2015 at 4:40 am

I'm retired I have 2 pensions and claim housing benefits also community tax benefit , I've been asked if I would like to go back to work for 15 hours a week , would my pensions or benefits be affected

Davy 29/08/2015 at 12:03 am

I have been claiming pension credit since May 2013.
I was informed that for every £500 over £10,000, I would lose £1. So they reduced my weekly amount by about £22 a week. And as I was working for between 15 and 20 hours a week, I had my weekly amount reduced to a total of £110 a week.
They knew about this when I claimed, and last year when I had my yearly review; as they had my bank statements for the previous three months, on each occasion.
On 30 July 2015 I received a letter stating that my pension credit and rent payment had been stopped because my income is more than the minimum amount the Government says I have to live on.
I have now stopped working part-time because of this, and am now getting the increased amount of £127 per week; and am now waiting for my rent payment to be reintroduced.
I got another letter dated 21 August 2015, that stated that I had been overpaid for the period 04/04/2013 - 17/07/2015 because I had failed to inform them of an increase in part-time earning; which were the same overall as the previous two years; as I had worked more some months, but overall in worked out about 15-20 hours a week over the yearly cycle.
This I was told was because of the new criteria that were introduced by the Government in July 2015.
Had they informed me of this, I would have stopped work immediately, under the new criteria; and this problem would not have occurred.
They now say I owe them £821.01, and state that if overpayment is recoverable, a separate decision will be sent to advise me of the amount of overpayment and why it is recoverable from me.
I then got another letter dated 24 August 2015, in the same vain, stating overpayment of £4887.19 for the period of 05/12/2013 to 29.07/2015; this being as a result of the change to my pension credit.
Had they informed me of these changes of the criteria for my pension credit, I would not have worked in the first place; and had I the continued to work part-time, I would have been liable; but, I was not, so I am obviously not liable.
They have not confirmed whether over-payment is due in both cases; but I would like more information regarding this; so that if they decide I am liable; I can go about the appeal in the correct manner.
If this fails, then I will take it up with a Government independent case examiner.
I would appreciate your advice on this, and what options or other options are open to me.

tas 18/08/2015 at 1:06 pm

Hi. My husband is 64 and on pension credit. I am 57 and he claims pension credit for me. Because all the pension credit goes on the bills and living expenses, there is no available money left. Can I get a part time job so I can earn my own money. If so how many hours can I work and will it effect the pension credit.

Dec 22/07/2015 at 2:48 pm

I am in receipt of a Transport Pension of take home (4 weekly £850)....... I am aware I am paying a tiny bit of tax to receive this Net amount. It is a pension due to Ill health from 20 years service to my previous company........

I have been offered some Security Work at approximately £3,000 per annum......

I am having a friendly dispute with my potential employer....... I am being a pessimist, and explaining to him that I will Be paying 20pence in the £1 on that £3,000 per annum extra income and he is an Optimist and says that that extra income has nothing to do with my Pension status and (I could 'In theory earn up to a little over £10,000 without paying on this extra income worked for him outside my income).......... Please advise me as if the news is that both pension and extra money are added together I might as well NOT take the job as opposed to his idea of me NOT being taxed on that £3,000........ Thank You / I hope someone knows - Dec

FinancingRetirement Editor 30/04/2015 at 11:42 am

@Bob - This may be something that the Pensions Advisory Service may be able to answer via whichYou can post your question directly to its webchat link to get a direct answer. I hope this helps.

Bob 27/04/2015 at 3:24 pm

I am thinking of working 12 hours a week self employed earning £60 to £80 per week I have small private pension £82 per month I get £38 a month pension credit and my rent is partly paid how will this affect my income and what money will I lose from my benefits.

FinancingRetirement Editor 02/04/2015 at 2:29 pm

@beany - you can check what benefits you would be eligible for at the Turn to Us website here. I hope this helps.

beany 01/04/2015 at 8:06 am

Ive been offered a job.20 hours per week minimum wage. At the moment I am receiving pension credit. .I am 62 yrs old..I now do not pay council tax also..will accepting this job affect pension credit and council tax?

FinancingRetirement Editor 31/03/2015 at 2:19 pm

@joannie - there is no restriction. I have added a link to additional information regarding working after your retirement here. I hope this helps.

joannie 29/03/2015 at 5:15 pm

My husband has retired and we are in receipt of a pension. He retired early due to
Ill health. We do not receive his state pension only his private pension. Am I able to work while in receipt of this? If so how many hours? Many thanks.

Peter 24/02/2015 at 6:26 pm

I am 71 and in receipt of two occupational pensions. I have a part time job (supposedly 4-5 hours pw) paying £3000pa. I am paying 40% tax. Would it be worth my while to pay all my pt time salary into a pension? Could I take the pension pot all as cash and if so when? What product would I have to use to build up the pension pot?
I am married with two dependent children (16 & 11). My wife (age 50) earns but pays no tax.

sylvie4 11/12/2014 at 8:54 pm

hi husand and i am on penshoin creidt has just got a job working 16 hours will this affect beniifits

Toddy 22/09/2014 at 7:04 pm

My Brother is on pension credit, is he able to work.

Patsy 14/07/2014 at 5:05 pm

I am 69 and have a very good private pension. I am financially secure and don,t need to work but would like to work as a carer. Would this affect any of my pensions. I am not on any benefits. I understand that what I earn is taxable. but assume my pensions would not be affected.

jillyarno 03/04/2014 at 4:34 pm

My husband is claiming for me on pension credit, Can I work while on this and if so how many hours

B 25/02/2014 at 9:19 am

I started full time employment in Sept 1985 and continued to work 37 1/2 hours per week until Feb 2007. I then commenced part time employment working 22 1/2 hours per week.

Am I still entitled to full state pension when I retire?

Kerbeygrip 30/01/2014 at 4:50 pm

I claim both a UK pension and a Spanish pension. I am 68. I have been asked to do a bit of work totalling under 8 hours over 2 weeks. I believe I can work 4 hours a week without it affecting my pension. Does anyone know?

Jem 08/01/2014 at 11:34 am

my husband and i are on pension credit. will it be affected if i get a part time job. Also how many hours can i work.

cj 14/12/2013 at 12:45 am

I work 9 hours a week at £6 31 ahour and get my state pensions of £128 aweek should i be paying tax

maz 04/11/2013 at 9:46 pm

I am a carer for my mum and my husband is on job seekers are we entitled to winter fuel allowance?

maz 04/11/2013 at 9:44 pm

I am a carer for my disabled mum and my husband is on job seekers allowance, are we entitled to receive the winter fuel allowance

Jan 03/11/2013 at 2:14 pm

I was born19/05/1952 when will be able to collect my pension , winter allowance ,and how much will I receive in my pension?

Dickie 29/08/2013 at 4:24 pm

I am 63 on pension credit (guaranteed) if I take a short term job,4 weeks at £250 per week . How would this affect my pension credit.

swift 26/08/2013 at 9:11 pm

I am 69 and have been offered part time work how much can I earn

Tammy 25/08/2013 at 8:33 am

I am 60innovember should be eligible for a pension as I have not worked can I get a pension

Tammy 25/08/2013 at 8:27 am

I am of age to get my pension I have not worked for over 30years will I be entitled to receive a pension.

Lulu 22/04/2013 at 7:42 pm

I am 83 and my wife 89.
Our combined pension for the year just ended was £10,588.76.
There is a temporary part time job on offer.
How much could I earn before I would have had to pay income tax please?

macca 25/03/2013 at 8:44 am

I am 62 single and on pension credit, I get full housing and community charge benefit, I don't have any savings. I have been offered a job 12 hours per week which would pay about £90 00p per week, would I be better off by taking this offer.

Freddie 15/01/2013 at 10:25 am

I am 64 years old and between my wife and I we receive £217.90 per week pension & pension credit. I have been offer a 4 hour place per week, can I earn any extra money?

yarie 09/01/2013 at 9:26 pm

I will be age 60 in one months time
what will i be entitlled to,will i be able to applie for a bust pass?..

mat 16/12/2012 at 11:53 am

I was 60 on 12/11/12 when will I be eligible for a Winter Fuel Allowanc?

richard 16/12/2012 at 11:51 am

I was 60 on 10/8/52 when will I be eligible for a winter fuel allowance please?

history 30/11/2012 at 2:14 pm

If someone is in a care home permanently will they receive winter fuel allowance

Gordie 10/11/2012 at 12:39 pm

Is there a limit to the number of hours I can work while receiving a state pension?

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