Individuals are liable to income tax on the amount of pension income, including the state pension, they are entitled to receive in a tax year. They can choose to be paid their state pension weekly in advance, or four-weekly or quarterly in arrears. As this does not alter the amount of their income liable to tax, individuals do not overpay tax by virtue of being paid their state pension four-weekly or quarterly in arrears.
Tax is not deducted at source from state pension payments. Where an individual has another source of income which is under pay-as-you-earn (PAYE), HM Revenue and Customs will include the individual's full state pension entitlement in their tax code so that, as far as possible, the right amount of income tax is deducted at source for the year.