It doesn't matter whether you work 16 hours or 40 hours, the fact that you recieve a pension will be taken into account and will be classed as taxable earnings. I would also imagine that you'd loose the incapacity benefit (although I'm not sure) as it's paid to people who cannot work????
I work with two retired, on full pension, Police Officers and at the end of each year they have to complete tax returns. Their pensionsn are included in the total income and, for thet past few years, they have had to pay 'super tax' because of it.