If you are a U.S. resident, then you must report your foreign pension as income on your U.S. tax return.
If this is a UK governmental pension, you would be able to claim a treat exemption on Form 8833 (statement to claim a treaty exemption) which you would attach to your mailed in tax return.
With respect to government pensions/public pensions/annuities (typically covered under the Government Service article) or social security payments, generally the payments are only taxable by the country in which the government is making the payments.
From @DS30 : Please click this link for more information on IRS - Foreign Pension and Annuity Distributions
If this is a UK governmental pension, you would be able to claim a treat exemption on Form 8833 (statement to claim a treaty exemption) which you would attach to your mailed in tax return.
You would still include the amount on your return under the social security section (as if a Form SSA-1099but you would also include a negative amount for this UK governmental pension on line 8 and the description should read "Tax exempt under US-UK tax treaty Article 17") (This is your option #3).
To enter the treaty exemption amount in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "other reportable income" in the search bar then select "jump to other reportable income". TurboTax will guide you in entering this information.
