With the income tax threshold frozen at £12,570 since 2021-22, anyone with a state pension next year of more than £242 a week will have some tax to pay.

Germanshepherdsmum

Sorry, I didn’t make the connection. My apologies.

No problem.

DaisyAnneReturns

www.theguardian.com/money/2023/oct/21/uk-pensions-warning-dont-get-caught-by-an-out-of-the-blue-tax-bill

www.youtube.com/watch?v=f5mmVv36fW0

It is yet another example of the people being squeezed further for more money. You have already paid taxes on this money. Now you are being asked to pay taxes again. National Insurance is a tax paid by individuals and corporations in the United Kingdom. It is a withholding tax just like FICA in the United States. There is a quote "The love of money is the root of all evil." Our governments and corporations are no longer for the people, but led by the dollar sign. They see us as their pawns to serve and fund their interests. Our money is being slowly squeezed out from our pockets through these self interested regulations and through the devaluation of our currency. Democracy has become Plutocracy.

Sorry, I didn’t make the connection. My apologies.

Germanshepherdsmum

I don’t understand what point you’re making growstuff - the WFP doesn’t depend on receipt of PC. It’s paid to all who receive the SP. Taxing it would be very unfair, as Doodledog has pointed out.

I already explained! Somebody suggested only giving it to people eligible for Pension Credit. I suggested that it would be fairer to tax it, if people feel that it shouldn't be given to those who don't "need" it.

growstuff

PS. He didn't pay extra as a married man.

Thank you growstuff.
I have asked him but he just shrugged 🤷

I think when you retire your pension both state and private should be tax free. You have paid it all your lives, also the tax threshold should be raised to £18,000. How about getting those greedy pop stars and other celebrities paying tax instead of giving them loopholes to avoid paying tax altogether

My husband has paid tax on his pensions since he took his pension ….nothing new!

I don’t understand what point you’re making growstuff - the WFP doesn’t depend on receipt of PC. It’s paid to all who receive the SP. Taxing it would be very unfair, as Doodledog has pointed out.

I am speaking from self-interest. My total income is just above the limit for Pension Credit. I receive Housing Benefit and have an NHS low income certificate, but neither of those make me eligible for any other benefits. I don't want it to be taxed, but it seems fairer than not giving it to people who aren't eligible for Pension Credit.

It is when a "cliff edge" is created. It doesn't have to be like that. It could be taxed.

It could. But whether that is 'fair' depends on the thinking behind its existence. Should those who have made provision for their old age get 20% less than those who haven't (or 40% if they have the 'golden' pension we keep hearing about), or is it a means of ensuring that older people are able to have the heating on in the winter? Fuel costs the same whether you get PC or not.

I don't know the answer. I don't qualify anyway, FWIW, and I doubt it will be available in a couple of years when my state pension finally kicks in, so I'm not speaking from self-interest.

PS. He didn't pay extra as a married man.

V3ra

Shill29

Who has a state pension of more than £242 ????

My Dad does. He was born in 1931. I don't know how or why, though I suspect he paid extra National Insurance as a married man in those days and my Mum had a reduced state pension?
My husband and I both qualified for our own full state pensions this year.

He almost certainly received SERPS/State Second Pension.

Doodledog

*If WFA were only given to those receiving Pension Credit, there would be many just over the threshold for Pension Credit who would lose an amount which is quite substantial to those on low incomes.*
Indeed. Means-testing is like that.

It is when a "cliff edge" is created. It doesn't have to be like that. It could be taxed.

If WFA were only given to those receiving Pension Credit, there would be many just over the threshold for Pension Credit who would lose an amount which is quite substantial to those on low incomes.
Indeed. Means-testing is like that.

Doodledog

EEJit

Doodlebug

"Maybe there should be a cut-off after someone has paid in for X years, though - I'm not sure about that."

You mean someone like pensioners who have paid for years, like myself, I paid for 49 years, from starting work at 16 to retiring at 65

Yes, that's what I meant. Some people pay in from the age of 16 (even earlier in the past) and others start after graduation at 21 or 22. Some take time out to look after children or work part-time. Some retire early. Maybe (and I haven't thought this through) everyone should be expected to contribute for at least a set number of years, and be able to choose when in their working lives to do it?

I don't mind paying tax. I pay it on my occupational pension, and therefore everything I earn over that is immediately taxed. Of course I would like to have more to spend, but I see it as fair enough, really. I believe in a large state, and that the only way to have facilities for all is to pay for them collectively. I also believe that those who have more should pay more, but that is based on the philosophy of 'from each according to ability: to each according to need', which should, IMO, underpin a civilised society.

When those who are perfectly able to contribute choose not to bother, but still get to use the things that others have paid for, then I do mind. People should be able to make choices about their lifestyles - stay at home with children, take early retirement, work part-time - whatever they like. But they should not, IMO, be able to choose that other people should pay for it. Anyone not able to work should of course be fully supported by 'the system', but otherwise we should all pay in if we expect to take out (by which I don't just mean benefits, but things like education, health, roads, and all public services).

You seem to envisage a scheme much like my brother's salary and retirement plan. From all money he ever earned was deducted a tax (6% he thinks). To receive he could stop work between 62 and 66, if he worked past 66 his little pot grew at 8% a year until he would be 70 (a mandatory age to begin payment out to him). Nobody has to work, but to receive payouts must work 10 years minimum. Spouses each have their own plans, but if one is higher than the other you may draw from the higher. Also, spouses who never worked and have no plan just receive an automatic 50% of the earners plan at the appropriate ages. His yearly return can be no higher than ~35,000. He has occupational pensions, with rules he says are confusing, requiring him to withdraw yearly after age 71.

Shill29

Who has a state pension of more than £242 ????

My Dad does. He was born in 1931. I don't know how or why, though I suspect he paid extra National Insurance as a married man in those days and my Mum had a reduced state pension?
My husband and I both qualified for our own full state pensions this year.

MaggsMcG

I pay tax anyway as I have an occupational pension its not large but it puts me in the tax bracket. As the pension is not enough to live on they should definitely raise the tax threshold because that will help everyone not just pensioners. I also think the Winter Fuel Allowance should be only given to those on Pension Credit. However, pensioners do pay tax. We pay fuel tax on our petrol and we pay VAT on goods we purchase. Even the low paid pensioners have to pay that.

If WFA were only given to those receiving Pension Credit, there would be many just over the threshold for Pension Credit who would lose an amount which is quite substantial to those on low incomes.

Nannan2

Yes threshold should be much higher- why is it below living wage?And why charge pensioners tax on pension when theyve ALREADY paid tax on their earnings that qualified them for the pension in the first place? Thats just making them pay twice.Makes no sense.(unless youre a greedy money- grabbing government of course)

Most people don't pay tax on pension contributions. That's why pensions are taxed.

DAR the full state pension is £815.40 every four weeks.

Doodledog Children are liable for income tax and have the same personal allowance as everybody else. Of course few children have incomes high enough to bring them into the taxable amount. I don't know if clever accountants can prevent child actors from paying their full liability by using legal tax avoidance schemes.

DaisyAnneReturns

How grasping does this thread have to get.

The legacy pension, if you get the full amount, is £156.20 per week. You would only get £240 a week if you have additional income and, if you pay tax at the moment, you obviously do. Lucky you.

This is a problem that is only going to affect a small number those whose basic pension is topped up by some goverment additional income such as SERPS, on which they have never previously had to pay tax and where tax isn't paid through PAYE.

Isn't it possible to show concern about a small group who are not you? Isn't it possible to talk about and understand some pensioners have never paid tax without immediately suggesting they must have been breaking the law or is that because it is what you would do in their place? Isn't it possible just to wish this small group could be informed, so it doesn't come as a shock to them and they can know they have put the money - however small - aside.

Who is that addressed to, DAR?

And who is suggesting that pensioners (or anyone) who hasn't paid tax has broken the law?

I agree, GSM, Age shouldn't be a reason for not paying tax. Maybe (and I was thinking aloud, rather than knowing I think it) there is a case for those who started paying tax at 15 being able to stop after a fixed number of years - I don't know. Do children pay tax, in the unlikely event that they earn more than the threshold? Child actors and the like?

Anyway, I think that the thresholds should be raised for everyone, and that there should be more gradual steps between the differing rates of tax.

Who has a state pension of more than £242 ????

I pay tax anyway as I have an occupational pension its not large but it puts me in the tax bracket. As the pension is not enough to live on they should definitely raise the tax threshold because that will help everyone not just pensioners. I also think the Winter Fuel Allowance should be only given to those on Pension Credit. However, pensioners do pay tax. We pay fuel tax on our petrol and we pay VAT on goods we purchase. Even the low paid pensioners have to pay that.

when we had the rise in april 2023 (state pension, occupational pension and dla) this took me back into paying income tax again after several years.
as i get an occupational pension income tax is deducted from this and until they raise the personal allowance i will continue to pay income tax.
when next year's rise comes into effect (when they make their minds up as to whether we get 8.5% or 7.5%) i will be paying even more tax.
i'm not exactly happy about this but as i said, until they raise the personal allowance i've just got to pay up and look pleasant.

Yes threshold should be much higher- why is it below living wage?And why charge pensioners tax on pension when theyve ALREADY paid tax on their earnings that qualified them for the pension in the first place? Thats just making them pay twice.Makes no sense.(unless youre a greedy money- grabbing government of course)