Pensions

[Rangie]

Those on the new state pension will be liable for income tax. Be interesting to know how they propose collecting it.

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I have other pensions that take me way over the threshold for income tax so they take tax from those, how it will work for folk who receive just the state pension will be interesting , I believe I'm right in saying that they promised the state pension alone wouldn't be subject to income tax, I think I've just seen some pigs flying past..😂

[Migv6 le Frog Fan]

Rachel from accounts did indeed promise that earlier this year.
Whether or not Healey sticks with that remains to be seen.
As Im still working and collecting my state pension I dont have a tax allowance any more.
In fact due to a slight under payment last year, my tax code is minus this year. 

[LC0112G]

HMG treat the SP as your first 'tranche' of income. Therefore, they allocate your Personal Allowance to your SP,  reduce your tax code by the amount of your SP, and then issue this reduced tax code to any other income providers you may have. So it all works out in the wash, providing the SP is less than your PA.

Once SP is greater than your PA, and if your SP is you only income, it's going to get very messy, because they can't recover tax due on your SP from a second or third income provider via your tax code being negative.

I suspect the approach taken will be to announce the full SP is £13K, but then only actually pay out £12.9K - the 'missing' £100 being the tax due. Trying to get all pensioners to fill in a self assessment form would just degenerate into another farce.

[STEMO]

This could get messy. The government are saying 'solely reliant with no other income'. What if you get, say, £1020 interest from savings? The limit is £1000 for 20% tax payers, so will the £20, which attracts £4 in tax, count as other income?
Or...will the whole £1020 count as other income?

[Rangie]

The easiest way would be to raise the tax threshold, the present one is totally ridiculous.

[ronnyd]

Now my miniscule private pension has finally run out, my SP is now my only source of income. As i stayed contracted in to SERPS until my retirement, my annual SP payout is way over the threshold amount.
I'll wait with bated breath to see how much i have to pay.

[Field Marshal Dr. Opti]

Those on the new state pension will be liable for income tax. Be interesting to know how they propose collecting it.

Yep...tax threshold is £12570 and this will remain until at least 2021, meaning more pensioners will be liable for tax.

I believe we can thank DEI hire Rachel from accounts for this clusterf*uck.

[Field Marshal Dr. Opti]

This could get messy. The government are saying 'solely reliant with no other income'. What if you get, say, £1020 interest from savings? The limit is £1000 for 20% tax payers, so will the £20, which attracts £4 in tax, count as other income?
Or...will the whole £1020 count as other income?

I thought Martin Lewis mentioned something about a £5000 buffer on earned interest.....although I think there is still the 20% tax to pay on pension over £12570.

Not sure I have this right, though.

[STEMO]

You certainly don't have 2021 right 

[Rangie]

I believe that you're also allowed to earn up to £1,000 pa on a "side hustle" ie eBay vinted etc. So get selling any old Omega parts you have in the shed..😂

[Varche]

I have six Elite 16 inch with bald tyres. Scrap man takes the rims for about 7 euros each ( but have to be without the tyres........) EBay or Wallapop it is!

[Rangie]

I have six Elite 16 inch with bald tyres. Scrap man takes the rims for about 7 euros each ( but have to be without the tyres........) EBay or Wallapop it is!

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There you are , on the way to a fortune already..👍

[Varche]

 

[Rangie]

A little bit of commonsense at least,the tax threshold will be raised to £13,036 so pensioners on just the state pension to rely on will not be subject to income tax , still not been raised high enough in my opinion, I have read that according to financial experts it should be around £17,000. It will be adjusted each year to keep in line with any increase in pensions, I think that only applies whilst this mob are our leaders, so I won't hold my breath, the sooner they go the better.

[STEMO]

A little bit of commonsense at least,the tax threshold will be raised to £13,036 so pensioners on just the state pension to rely on will not be subject to income tax , still not been raised high enough in my opinion, I have read that according to financial experts it should be around £17,000. It will be adjusted each year to keep in line with any increase in pensions, I think that only applies whilst this mob are our leaders, so I won't hold my breath, the sooner they go the better.

They must have listened to you, Mick