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Tax on part-time work and other income

Income you receive from part-time work in retirement counts as 'taxable income' – along with income from your State Pension, personal or company (occupational) pensions and from certain taxable benefits.

If your overall taxable income is more than your tax-free allowances (income you can earn without paying tax) you'll be taxed at the usual Income Tax rates on the difference. However, your tax-free personal allowance is more generous once you reach retirement age, which means you can earn more before having to pay tax. You may also qualify for other allowances that can reduce your tax bill.

• More about how much tax you pay in retirement

Working and putting off claiming your State Pension

There are incentives for you to take your State Pension later, instead of when you reach State Pension age ('deferring' your claim). If you put off claiming you have two possible options:

You have to put off claiming your State Pension for at least five weeks to earn extra State Pension and at least 12 consecutive months to qualify for a lump sum payment.

Putting off your claim may be especially suitable if you want to work after you reach State Pension age, as you'll be less dependent on the State Pension. But even if you're not working you can still choose to get more by putting off your claim.

• Taking up your State Pension later (over 50s section)

What if you're already claiming State Pension?

If you're already getting the State Pension you can cancel your claim if you get the chance to do some work that would pay enough for your needs. Your State Pension will stop until you choose to claim it again. Then, depending on how long you stopped claiming, you can take either the lump sum or extra State Pension. Note that you can only cancel once – when your State Pension restarts you won't be able to cancel again.

National Minimum Wage after you retire

You are still entitled to the National Minimum Wage (£5.52 an hour from 1 October 2007) for any paid work you do after you reach State Pension age. For advice you can phone the National Minimum Wage helpline on 0845 600 0678. Lines are open 8.00 am to 6.00 pm, Monday to Friday.

• More about the National Minimum Wage Opens new window

Effect of paid work on your current benefits

Bear in mind that any money you earn after State Pension age may affect income-related benefits such as Pension Credit, Housing Benefit and Council Tax Benefit.

Staff at your local pension centre can tell you how income from paid work will affect your Pension Credit and other benefits. They can also advise you on how putting off claiming your State Pension might affect your benefit entitlement.

If you're looking for work through your local Jobcentre or Jobcentre Plus office, staff there should be able to tell you how extra income from working may affect your benefits.

• Search online for your local pension centre Opens new window
• Find your nearest Jobcentre Plus office Opens new window

Schemes to help you find work at retirement age

If you want to find work, there's a range of government services that can help.

New Deal 50 plus

This scheme can help if you're aged 50 or over and have had difficulties getting a job, or work that pays a decent wage. It provides you with a personal adviser to help you find work.

• Visit the New Deal 50 plus website Opens new window
• Working to suit you (over 50s section)
• Job programmes for over 50s (over 50s section)

New Deal for Disabled People

If you get disability or health-related benefits, the New Deal for Disabled People can help you. A 'job broker' will help you find suitable work.

• New Deal for Disabled People (disabled people section)

Finding work as a volunteer

Working as a volunteer can be extremely rewarding after you retire. It can also help you learn new skills that you may be able to use later for paid work.

If you'd like to find out more about volunteering, there's a range of groups and services to help you. These cover everything from helping in schools to environmental work.

Carrying on work - more incentives since 2006

If you reached the age at which you can start claiming your company pension scheme after 1 April 2006, you don't need to stop work in order to claim. You have a number of options, including taking some of the pension you've built up while continuing to work for the same employer.

• Pension rules from April 2006

More useful links

• What to do if you have little or no pension
• More about State Pension rates and forecasts
• State Pension deferral (over 50s section)
• Help finding or at work if you're disabled (disabled people section)