Some small private pensions paid by employer pension schemes or insurance companies have not been properly taxed under PAYE.
HMRC had intended to bring these pensions properly into tax from 2007-08 but they have now decided that untaxed pensions should be taxed only from 2008-09.
Pensioners will only be affected if they receive a pension which is not being taxed, the untaxed pension is not included in the tax code applied to their main source of income, or their estimated taxable income exceeds the relevant limit set out above.
For most people this should mean that their pension will be taxed from 2009-10 onwards and any underpayment of tax for 2008-09 will normally be collected in 2010-11 through PAYE month by month.