When I left, HMRC, via Ty Glas Road, took my RAF pension as my primary income and offset all my allowances against it. All other incomes were taxed at the base or higher rate. I had to do an annual return. I have now fully retired and things are the same, my service pension is my primary income and my other pensions are taxed at the basic rate.. It makes life easier to have your service pension as the primary one as it is for life.
The only problem I had was convincing my new, post RAF, employer that my salary wasn't my only income and not to treat it as such. It didn't happen to me but I do know people who had a second set of allowances set against their new salaries and ended up with rather a large bill when HMRC caught up with them.