Council Tax

Received notification today that it's increasing by 6.5%


Received notification a few weeks ago that the State Pension is increasing by 3%


"Something not right here."


The proportion of your State Pension that exceeds your personal allowance is taxable.

So, double whammy.

 

The state pension is far short of your tax allowance . Also the current obsession with quoting everything in percent's is not very good for comparisons. My maths teacher at college , said percent's are funny things and best left alone.

 

Yes the basic State Pension is lower than the personal allowance of £11,500.

The basic State pension is £122.30 a week, but hundreds of thousands of people get more than double that, It depends on their earnings and added to that can be Graduated Retirement Benefit. (Which many of us paid into when it was around).

 

Annoying that every time the state pension increases, my tax take on my Private Pension increases till eventually my private pension will be Nil Was it worth saving all that pension pot

 

This is true.

For those of us whose State Pension is higher than the tax free a allowance, the Inland Revenue notifies your private pension provider, the new total of your State Pension and they add the two together before working out your tax liability.

Then the Tax People write to you several times a year asking you to complete a new self cert in the hopes of finding out if you've any new undeclared income they can tax.

Well.. They did to me for a few years, until I wrote back to them to say "FFS, give over with it. If I get any addition income that isn't taxed at source, I'll let you know!"
They've not written to me since.

 

How do you actually get a state pension that is over the tax free allowance?
Tell me, I want one.

I think, you can only exceed the tax free allowance if you have a private pension, but I could be wrong.

 

I don’t understand this. If you’re a basic rate taxpayer, they will take 20% of any increase, over and above the annual allowance, so how they can take all of it, when you get to keep at least 80% of any increase?

 

Sounds sensible to me, are you suggesting that pensions, no matter how large, should not be taxable?
I put my savings into a high, (joke) interest account, but the interest gets taxed, isn't that the same kind of thing.

 

I tend to think all through your life if your income increases you pay more tax.
I'm struggling to see why anyone should think once retired that should change.