Do I need to submit a tax return for this tax year now I’m retired?

Q: Does everyone need to submit a tax return for the 2025/26 tax year? I'm early retired and do not earn over my personal allowance.

A: If you have now retired, and your total income — including pensions, investments or interest from savings — is below the personal allowance of £12,500 a year, you are unlikely to need to complete a self-assessment tax return.

You are not alone. Many people go through their working and retired lives without having to complete a tax return. For those who are employed and pay tax through the PAYE (pay as you earn), income tax and National Insurance are automatically deducted from earnings.

However, if people are self-employed or have additional freelance earnings, they will need to complete an online form to ensure they are paying the correct tax.

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But there are a number of other cases where you may also need to complete a tax return — these apply to both working and retired people.

If you are a higher-rate taxpayer, with combined earnings of more than £50,270 a year, you may need to complete a tax return, particularly if this income is not taxed at source. Filling in a tax return also allows taxpayers to claim back higher-rate tax relief on any pension contributions they have made.

You’ll also need to complete a return if you have other untaxed income streams — for example, rental income, dividends on shares or investments, or interest payments from deposit and savings accounts that are above the personal savings allowance.

Similarly, those who have made capital gains over the annual exemption (currently £3,000 for the 2025/2026 tax year) will also need to complete a return.

Tax returns aren’t just about HMRC collecting money, they are a useful way to claim back any additional tax paid. So, if you make significant charity donations, or additional pension contributions, you may need to fill in a form.

Many people get put on emergency tax codes when they first make a flexible withdrawal from their pension, which can result in a tax overpayment. If this has happened, you can complete a special HMRC form to get a refund. However, if this hasn’t been done, you can also complete a tax return and your tax position will be adjusted for the following year.

Overall, HMRC says around 12 million people submit a tax return each year, through the self-assessment system. This number is rising due to the fact that frozen tax allowances are creating more higher-rate taxpayers.

If you think you may need to complete a tax return, you need to apply to HMRC to file online. This online form will need to be completed, and any outstanding tax paid by 31 January in the following tax year.

• Read: 3 steps to avoid higher rate tax in retirement
• Read: How might the Government change Cash ISAs?
• Read:  What income might I get from a £250,000 pension?

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.