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Profit, employment and pension income / earned income. Earned income consists of income chargeable under the Income Tax (Earnings and Pensions) Act 2003, such as pay, private and occupational pensions, retirement annuities, state retirement pensions and taxable social security income.
The Average Pension Income. An analysis of the average pension income requires understanding the difference between a defined benefit pension plan and a defined contribution plan. Employers pay into worker defined benefit plans, while workers contribute to their own pension under a defined contribution plan.