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Tax on State Pension


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Interested on views on payment of Tax on State Pension.In my view the State Pension should be FREE of any Taxation.

£12500 is tax free as we are all aware. My own state pension exceeds this amount so I have to pay tax, which is taken from

other Private Pensions. Any thoughts on State Pension regardless of the amount should be Tax Free.

I also find it annoying that the State Pension is regarded as a Benefit??

FS

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You might as well say that all pensions should be tax-free.

 

But I don't see why UK pensioners shouldn't pay tax on the same basis as everyone else. A lot of them are better off than younger generations who will be trying to save for their own retirement as well as paying for existing pensioners.

 

HB

Illegitimi non carborundum

 

 

 

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Honeybee13 thanks for your reply, interesting view on the subject.I believe some Benefits are taxable so you could argue that the State Pension as it is regarded as a benefit should attract taxes well

It was a discussion that a group of us old codgers, had last week and it got very heated as you can imagine.Three of us are ex military who served between the mid 50s to mid 70s and did not qualify for any form of Pension.Most of us get a reasonably high State Pension along with additional Private Pensions although not all of us.We all felt the State Pension should be tax free as we are all forced to contribute towards our State Pension, which is a very weak argument on subsequent reflection.

Didn't realise there was a petition to stop the word benefit for State Pension

Thanks for your view

FS

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State pension is treated the same for tax as any other pension which you receive, in so far as it is taxable income.

 

The only difference is it's not subject to any PAYE or "at source" tax deduction using a tax code. Such tax codes operate against other ex-employer pensions and your state pension is usually deducted from your income tax pesonal allowance.

 

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  • 2 weeks later...

You can change that

I have my tax allowance on my company pension as I'm not quite at state pension age yet.

Its wasn't allocated by default - you need to contact the 'revenue' and run the gauntlet ...

Edited by tobyjugg2

You know what IS patriotic?

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Until very recently I didn't mind that the state pension was taxed.  Then my aunt was assessed as needing 100% continuing care and funded by the NHS.  This means they take her state pension away - after including it in calculations for tax.  She does have another pension from nursing so she has taxable income.  She's paid for her own care for years and although it's great that she doesn't have to any more it still feels like a further kick in the teeth.

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@tobyjugg2 - Once you start to get a state pension, it will normally be deducted from your Personal Allowance via the PAYE code operated against other pensions.

 

@hightail - Paying for care is always a hard pill to swallow but State Pension has always been taxable. When NHS Continuing Care finally kicks in, it's often a bonus and a saving compared to self-funding.

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2 minutes ago, slick132 said:

Paying for care is always a hard pill to swallow but State Pension has always been taxable. When NHS Continuing Care finally kicks in, it's often a bonus and a saving compared to self-funding

Oh it’s a massive bonus - not pretending it isn’t.  It’s also long overdue so it’s an annoyance, an irritation that there’s still a clawback.  It wouldn’t wrankle so much if they just stopped paying it but that’s not how it works.  They pay it so it is counted as income for tax purposes and then take it back.

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  • 2 weeks later...

I'm going to be the odd one out here as I don't mind my pension being taxed

 

I still have another 30 years to go (or there about) but I would find it odd if you had a large portion of the population not paying taxes

 

I'm lucky in that I have a very good workplace pension, a private pension and (hopefully) the state pension - it's meant going without the odd luxury here and there but I felt it was important to get a bit away for the eventual retirement (which talking to people my age makes me the odd one out) 

 

After all its taken out of my wages before tax so why not pay the tax later down the line 

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The old codgers have met again and as always we put the world to rights.State Pension is still an issue.Although we are unsure of the exact figures we all agreed that the tax free allowance should be £15000 ,obviously good for pensioners but also will take 10s of thousands of part time workers out of paying tax as well, we think the Tax obtained for HMRC for people receiving or earning £15k or less is very small.

FS

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I also think its right that income is taxed the same for all

 

I question supertax rates (and no I dont pay higher rate tax anymore) although do accept A higher rate tax for people earning over a certain amount - but I think my issue with that is far more the massive and unwarrented (IMO) difference in earnings

 

I also question that people on benefits pay tax - thats clearly a mismatch - although I think thats that the tax lower threshold and basic wage  is clearly too low

 

 

Edited by tobyjugg2

You know what IS patriotic?

Loving your country enough to care for its old and poor, fund its institutions, unite its communities, feed, house and educate its children, restore and live in balance with its environment, plan with care for its future, build its alliances, and perhaps above all - tell it the truth

 

 

The Tory Legacy

Record high: taxes, immigration, excrement in waterways, energy company/crony profits

Record low: living standards and investment

Crumbling Hospitals, schools, council services, businesses and roads

They squander taxpayer money by the £thousands on a failed ex-PMs luxury troughing on a plane, rather than feed UK children

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