State Pensioners will be paying tax.

2oldcodgers

Currently any pensioner with a weekly state pension of over £242 a week is paying income tax on the excess. My state pension went up to £258 a week last April.
Now it looks like that it will increase further next April by up to 8% making the payment £279 a week. Of that I will have to pay an extra £7.40 tax a week!! Ridiculous!
Why are state pensioners having to have some of the increases taken off them. We didn't get any tax relief when we paid in  so why should we pay tax now? If the state pension followed the likes of a private pension you had tax relief by increasing the amount paid in so it is only fair that you pay tax when you get it back.
Confused and annoyed.

woodbine

If I were you I would be thinking myself lucky that I was getting £258 a week SRP, I wouldn't be concerned about what may happen next year, the problem doesn't lie with the amount of pension but the freezing of tax thresholds and that affects anyone who pays tax, the good news for you is that you will still be £12 a week better off next year when hopefully inflation will be below 5%

It also has to be said that unlike you (and me shortly) many pensioners are still on the pre 2016 SRP which is currently £159 per week so well below paying tax of any sort.

2oldcodgers

woodbine said:

If I were you I would be thinking myself lucky that I was getting £258 a week SRP, I wouldn't be concerned about what may happen next year, the problem doesn't lie with the amount of pension but the freezing of tax thresholds and that affects anyone who pays tax, the good news for you is that you will still be £12 a week better off next year when hopefully inflation will be below 5%

It also has to be said that unlike you (and me shortly) many pensioners are still on the pre 2016 SRP which is currently £159 per week so well below paying tax of any sort.

Thanks
I retired at age 65 in 2014 so am on the 'old' state pension. I have an enhanced pension simply because I worked hard and earned quite a decent income for the whole of my working life. Because of the large amount of NI contributions the DWP give me a sizeable second pension - on the basis of what you pay in you get back sort of thing.
To be able to get that second pension I spent years studying and examinations to improve my lot like most people are able to do.
Additionally I get approx £65 a week guaranteed pension credit as our total income falls below what the DWP say that we need. 
Conversely if I had just plodded along in my job earning the basic income my Pension Credit would be paid to compensate for the loss of the second pension. You don't pay tax on Pension Credit!
So in effect I would not be paying tax weekly than I do now - silly me for working/studying hard.

poppy123456

You were very fortunate to be able to do that. Unfortunately many people can’t.

WhatThe

silly me for working/studying hard

Not at all! It suggests you enjoyed a meaningful, socialised, independent adult life which many of us haven't (couldn't)

WhatThe

I'm ashamed to say this but I'm over 60 and surviving on £60+ weekly - despite trying to work and study hard (no debts just a bedroom tax to pay) 

(the £20 uplift to UC only offset the bedroom tax I pay and still amounted to far less than my legacy benefits - the group action for judicial review was always going to be a waste of time)

Biblioklept

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

woodbine

Biblioklept said:

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

In most cases it isn't taxed but where all pensions added together it can be, the N.I pension pot has enough in it to suggest that pensions will be paid for decades.

michael57

WhatThe said:

I'm ashamed to say this but I'm over 60 and surviving on £60+ weekly - despite trying to work and study hard (no debts just a bedroom tax to pay) 

(the £20 uplift to UC only offset the bedroom tax I pay and still amounted to far less than my legacy benefits - the group action for judicial review was always going to be a waste of time)

nothing to be ashamed about your debt free unlike many who live way beyond there means be proud of yourself 

Biblioklept

woodbine said:

Biblioklept said:

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

In most cases it isn't taxed but where all pensions added together it can be, the N.I pension pot has enough in it to suggest that pensions will be paid for decades.

Oh so if someone's personal pensions and state pension take their income high enough they'll pay tax? I mean I don't see the issue with that but maybe I'm being naive? 

Biblioklept

WhatThe said:

I'm ashamed to say this but I'm over 60 and surviving on £60+ weekly - despite trying to work and study hard (no debts just a bedroom tax to pay) 

(the £20 uplift to UC only offset the bedroom tax I pay and still amounted to far less than my legacy benefits - the group action for judicial review was always going to be a waste of time)

That's much less than a usual monthly UC award for someone over 60. Are they paying you correctly?? Also have you looked at a DHP for your bedroom tax @WhatThe?  

WhatThe

Hi, no I haven't received the correct benefits for a long time 

I thought a DHP was only for the short term though

poppy123456

WhatThe said:

I thought a DHP was only for the short term though

Yes that's correct and then you need to reapply. It's also not guaranteed but even if it's just for a short time then it's worth applying.

woodbine

Biblioklept said:

woodbine said:

Biblioklept said:

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

In most cases it isn't taxed but where all pensions added together it can be, the N.I pension pot has enough in it to suggest that pensions will be paid for decades.

Oh so if someone's personal pensions and state pension take their income high enough they'll pay tax? I mean I don't see the issue with that but maybe I'm being naive? 

exactly you have a tax allowance £12500 a year any income over that and you pay tax, some things are exempt like AA or PIP for example, the problem people are having is that the allowance used to be upgraded every year the govt has now frozen it.

Steve_in_The_City

DHP is short term but can easily be renewed (if you meet the criteria). I had it for 2.5 years until I moved to a 1 bed flat. So it is well worth applying for. 

2oldcodgers

Biblioklept said:

woodbine said:

Biblioklept said:

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

In most cases it isn't taxed but where all pensions added together it can be, the N.I pension pot has enough in it to suggest that pensions will be paid for decades.

Oh so if someone's personal pensions and state pension take their income high enough they'll pay tax? I mean I don't see the issue with that but maybe I'm being naive? 

It's nothing to do with other income or other pensions. The problem is that the state pension alone , in my case is over the tax free amount. So consequently that excess ( £14508 state pension as from next April - the tax free allowance £12570 = £1938 will suffer tax at 20%.
Any other income will all suffer tax of at least 20% as well.
So in my case and I can't be the only one, the increase next April will be 6.4% and not 8% - brilliant!

ladyluck

It seems at last the government has raised the state pension whilst freezing the allowance before tax. It’s win, win for them. Keeping pensioners happy to have their pension raised, meanwhile creating new taxpayers if they have a few pounds in a private pension. How can that be fair? 

2oldcodgers

ladyluck said:

It seems at last the government has raised the state pension whilst freezing the allowance before tax. It’s win, win for them. Keeping pensioners happy to have their pension raised, meanwhile creating new taxpayers if they have a few pounds in a private pension. How can that be fair? 

Yes it is.
And for those whose only retirement income is the State Pension (no private pensions etc) they too are likely that next will have to cough up tax on their State Pension.

Wibbles

Any Pension (be it sourced from State or Private) is classed as taxable income - and therefore, like any normal earnings is taxed...

Why should it be classed as tax free ?

woodbine

2oldcodgers said:

Biblioklept said:

woodbine said:

Biblioklept said:

Have to admit I've always assumed that by the time I get to retirement age that state pension will no longer exist so I've never much looked into it and don't really understand it. I didn't realise it was taxed?? 

In most cases it isn't taxed but where all pensions added together it can be, the N.I pension pot has enough in it to suggest that pensions will be paid for decades.

Oh so if someone's personal pensions and state pension take their income high enough they'll pay tax? I mean I don't see the issue with that but maybe I'm being naive? 

It's nothing to do with other income or other pensions. The problem is that the state pension alone , in my case is over the tax free amount. So consequently that excess ( £14508 state pension as from next April - the tax free allowance £12570 = £1938 will suffer tax at 20%.
Any other income will all suffer tax of at least 20% as well.
So in my case and I can't be the only one, the increase next April will be 6.4% and not 8% - brilliant!

which is good news as inflation should be around 5% next year and you will be getting a 6.4% rise...well done

2oldcodgers

woodbine said:

which is good news as inflation should be around 5% next year and you will be getting a 6.4% rise...well done

Put it that way you are right but what would happen if wages/inflation started to hit the economy from next month to September 2024 - If either went up by more than 6.4% I would lose out.
The 'missing' 1.6% rise ends up back in the hands of the government. You could also say that the State Pension is also a means tested payment - earn too much and the state pension is reduced.
Still there is nothing I can do about it - what happens happens.
This country has it in for those that saved their salaries/wages whilst working - taking no holidays etc never mind the difficulties being encountered with Blue Badge applications for the disabled as well as the 'pretending ' that the 10 year review will be a box ticking exercise only.