Have a Tax Question? Ask a Tax Expert
As US residents they are taxed on worldwide income. So it will include all income. They would get the foreign tax credit for taxes paid to UK. As far as the social security and pension, you should look to the tax treaty between the US and UK. Most likely the US will respect the not taxable treatment here.
PensionsUnder the new treaty, pensions and Social Security payments generally are taxable only in the country of residence. (This is the same treatment as under the current treaty.) The new treaty also provides that the country of residence will not tax pensions received from the source country that would be exempt from tax in that country if the recipient were a resident of such country. The new treaty provides that only the source country will tax lump-sum payments.
This is a summary of the US UK tax treaty provisions regarding pension and social security. They are not taxable in the US. When they are reported on the US tax returns a reference to the treaty and the fact that they are not taxable should be disclosed. You can find the complete treaty at IRS.GOV