Pension tax annoyed

the black fox

the black fox

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Jeff
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Just realised that since the triple lock state pension update ,my private pension is now incurring income tax .. had no notification of it which has really p***ed me off had to contact my provider to find out .. talk about give with one hand and take back with the other .was fuming yesterday grrrrrrrrrr
 
Yes tax allowances have stayed the same for a few years now. Stealth taxes really.
It will not improve whoever wins GE.
 
I will be that way Jeff in 5 years my private pension plus old age pension will put me way over the threshold
 
The "triple lock" has been beneficial in improving the state pension but the biggest detriment to recipients of the new state pension is that the Personal Allowance threshold has been stagnant bringing many pensioners into paying tax if they also have a modest private pension too.

Should the Conservatives return to office (or indeed Labour adopt the same policy) it will interesting to see how the "Triple Lock Plus" will be implemented to remove pensioners from paying tax purely on their state pensions, by the selective raising of pensioners Personal Allowance?
 
The stealth tax rises have hit almost everyone. The Personal Allowance has barely risen since Tax Year 2019/20 - just a £70 uplift that year, now frozen until 2025/26 (or perhaps even longer).

We obviously don't know what inflation will do over the coming years, but from April 2019 to now, inflation (CPI) has risen 24%.

The politicians can (and do) spin it as "taxes haven't risen", but they most certainly have. We all know it.

I'm not a member, or a supporter, of any party, and haven't even decided yet who I will vote for - I just wish the politicians could be honest.



(edited - I hadn't realised until now that many of the Parties are talking about extending the Personal Allowance freeze even longer)
 
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Boots said:
I just wish the politicians could be honest.
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As things stand at the moment, an honest politician would last about as long as an icicle in a hot oven.
Voters, too often, prefer the obvious lies to the unpleasant facts. :headbang:
 
Never heard of an honest politician! As rare as hens teeth...
 
yep can't see the personal allowance going up any time soon.
tax by the backdoor , I have just early retired at 54 and will be looking to start doing bits of draw down soon to make sure i maximize my tax efficiency
i will probably be doing the initial lump sum to put into my high interest account using the 25% option
 
Raincloud said:
Never heard of an honest politician! As rare as hens teeth...
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I don't agree the problem in this country is we want a huge amount for our tax and NI and it simply isn't deliverable
since Brexit costs have sky rocketed , the economy has barely moved along and we also have pointless trident etc.

We need Tax rises not Reductions and that doesn't get votes.
 
the black fox said:
Just realised that since the triple lock state pension update ,my private pension is now incurring income tax .. had no notification of it which has really p***ed me off had to contact my provider to find out .. talk about give with one hand and take back with the other .was fuming yesterday grrrrrrrrrr
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I retired 2 years ago at the age of 59.5 after 37 years of working for the same employer.... During my time working for them, the original pension scheme was stopped and a new scheme started. Lucky enough to be on a final salary scheme meant the payout on the original scheme would be at my finishing salary.... 2/3rds of my time was with the original scheme .

With working shifts and receiving a shift allowance I also contributed into a Shift Pension scheme, an AVC, as did my employer....

My original plan was to retire at 60, which was the contracted retirement age when I started working for them, even though I would be short of the 40/80ths....

About 5 years ago I attended a "retirement course" where they explained the options that were available and what you could do with regards to financing your retirement, and I learned I could use my shift pension to bridge the gap up until receiving the State Pension.... Some other factors also came into play, one being my job got regraded resulting in a 10% increase in my salary. I decided on a target retirement date of 25/4/2022....

During 2021 I started suffering palpitations whilst at work and after going to see the on-site nurse was blue-lighted to hospital on 2 occasions. Eventually got to see a cardiologist and on the day I saw him I handed my notice.

This is where the fun started, as effectively I would have 4 pension pots to start paying out..... I requested my figures, including using the AVC pots to pay out monthly until my state pension age of 67.... Was more than happy with the figures....

I actually adjusted my retirement date to 1/7/2022 due to having over 3 months worth of annual leave and credit time but actually attended work for the final time mid March.

The fun started when the 1st pension payments came through.... Each one assumed that they had the 1257L tax code to play with and the first payments were based on that. HMRC very quickly noticed and adjusted my tax coding.... I had to phone HMRC to discuss the problem, as well as the pension administrators!!! 3 of the 4 pensions were given a BR tax coding and the highest payout one was given an adjusted coding to make sure I paid the correct amount that year!!!

In April 2023 my tax coding returned to normal and my monthly income improved due to now paying the correct tax....

The funny thing is my 2 main pensions come under the same administrator - Equiniti and in the same office building but they failed to cross check things..... I even had to mail them the same documents twice to the same office..... And tame thing happened with the Pru, had to mail them the same documents twice!!!

Taking the option to retire early was the best thing I've done in my life.... I'm living very comfortably on my pension and will hopefully live long enough to receive my state pension.... I don't begrudge paying income tax on my pension, just like I didn't begrudge paying 40% tax when I was working...

No doubt I'll encounter some more fun with Income Tax codings when my State pension kicks in!!!
 
The current situation is that the present Conservative Government has made promises regarding the treatment of the State Pension going forward, namely that the triple lock will continue and that the State Pension will not, (never!) be taxed.

The Labour Party have made no such promises, so presumably the Triple Lock could be discontinued and that when the State Pension exceeds the personal allowance, the excess will be taxed.

When the colour changes, the policy changes, like most Government decisions
 
BillN_33 said:
The current situation is that the present Conservative Government has made promises regarding the treatment of the State Pension going forward, namely that the triple lock will continue and that the State Pension will not, (never!) be taxed.
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Yes. It's pretty easy to make promises like that when you know you're going to lose.

My local area has 44% employment. Even if all those people are paying tax (and with average income of 36k, they ain't) that's a lot of non tax payers for the wotking to pay for.

The country is broke.
 
Dave Canon said:
I accept that my pensions combined are subject to tax and rightly so.

Dave
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well its tax free to put into a pension so have also allways thought they will be tax at the end but at least no NI
 
If you're paying tax on your pension you're doing not too bad! A touch like the kids paying Inheritance Tax, lots moan about it but still take the money!
 
admirable said:
If you're paying tax on your pension you're doing not too bad! A touch like the kids paying Inheritance Tax, lots moan about it but still take the money!
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You start paying tax once you exceed the personal tax allowance. This tax year 2024/25 that’s £12,570, which works out to roughly £240 a week. That’s hardly a fortune. Unless the personal allowance starts increasing by a decent amount year on year then lots of people surviving on only a State pension will be dragged in to paying income tax before too long.
 
boogie man said:
Unless the personal allowance starts increasing by a decent amount year on year then lots of people surviving on only a State pension will be dragged in to paying income tax before too long.
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There is always an argument against paying tax, whether it is valid or specious.

However, the argument for paying tax is seldom or never heard. I wonder how many people, who don't want to pay tax, think there are government plantations of magic money trees hidden all over Britain?

--- Honestly: there were ten pound notes all over this one, yesterday ---

Litho tree DSC02324.JPG
 
It's true. The tax allowance should really increase in line with the living wage ie it should be £20,840/year. How can it be said that you need this to live on yet take tax off it? Or have a state pension below it? (Rhetorical - no government could afford to hike the allowance to that level in the foreseeable future).
Above that level, a tax rate of 25% would not be unfair.
 
The Labour Party have spent 14 years saying that the Conservatives have reduced the tax payable by the rich and now they have started to penalise the poorer members of society

"Ms Reeves tweeted in May 2017: 'It's Labour who will stand up for pensioners, defending the triple lock & winter fuel payments.'

And in November last year, her now deputy in the Treasury, Darren Jones, wrote to the-Chancellor Jeremy Hunt as as he prepared the autumn Budget, demanding a promise that no pensioner would be stripped of their winter fuel payment."

Deputy PM Angela Rayner has also previously tweeted: 'Labour will protect 'triple-lock' on state pensions, maintain the Winter Fuel Allowance & free bus passes for pensioners.'

Source - https://www.dailymail.co.uk/news/ar...ter-fuel-allowance-10-million-pensioners.html
 
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boogie man said:
You start paying tax once you exceed the personal tax allowance. This tax year 2024/25 that’s £12,570, which works out to roughly £240 a week. That’s hardly a fortune. Unless the personal allowance starts increasing by a decent amount year on year then lots of people surviving on only a State pension will be dragged in to paying income tax before too long.
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Sorry, I was referring to the OP's post but obviously didn't make myself clear. Anyway, the state pension is there in order to offer basic support for those that need it, it's not intended to supply a luxury lifestyle.
I receive my state pension, I also have a bus pass that allows me to travel anywhere in Scotland and a rail pass that allows me to travel anywhere in the county for £1. Also lots of other stuff including free health care, cleaners, carers, mobility aid should I need it in the future, help with shopping etc.
This all has to be paid for by the government.
 
BillN_33 said:
The Labour Party have spent 14 years saying that the Conservatives have reduced the tax payable by the rich and now they have started to penalise the poorer members of society

"Ms Reeves tweeted in May 2017: 'It's Labour who will stand up for pensioners, defending the triple lock & winter fuel payments.'

And in November last year, her now deputy in the Treasury, Darren Jones, wrote to the-Chancellor Jeremy Hunt as as he prepared the autumn Budget, demanding a promise that no pensioner would be stripped of their winter fuel payment."

Deputy PM Angela Rayner has also previously tweeted: 'Labour will protect 'triple-lock' on state pensions, maintain the Winter Fuel Allowance & free bus passes for pensioners.'

Source - https://www.dailymail.co.uk/news/ar...ter-fuel-allowance-10-million-pensioners.html
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Ah well that one went down the toilet pan rather quickly , talk about lying with a smirk on there faces … new nick name is robbing Rachel thieves
 
BillN_33 said:
The Labour Party have spent 14 years saying that the Conservatives have reduced the tax payable by the rich and now they have started to penalise the poorer members of society

"Ms Reeves tweeted in May 2017: 'It's Labour who will stand up for pensioners, defending the triple lock & winter fuel payments.'

And in November last year, her now deputy in the Treasury, Darren Jones, wrote to the-Chancellor Jeremy Hunt as as he prepared the autumn Budget, demanding a promise that no pensioner would be stripped of their winter fuel payment."

Deputy PM Angela Rayner has also previously tweeted: 'Labour will protect 'triple-lock' on state pensions, maintain the Winter Fuel Allowance & free bus passes for pensioners.'

Source - https://www.dailymail.co.uk/news/ar...ter-fuel-allowance-10-million-pensioners.html
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the black fox said:
Ah well that one went down the toilet pan rather quickly , talk about lying with a smirk on there faces … new nick name is robbing Rachel thieves
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Now, what is the military epithet "no plan survives first contact with the enemy"

Politically, it is one thing to 'demand from opposition benches' but quite another to govern.

There is a likely rocky road ahead for all tax payers including those pensioners that will progressively be paying tax caused by IIRC fiscal drag.

As mentioned above, the only solution that will resolve that is to, incrementally increase the Personal Allowance for 'all' or only (possibly controversially) selectively for pensioners. IMO if done it should be "for all" as that will mean the lower paid will slowly have that little bit more money to spend and helps the overall economy.

Personally, I would welcome seeing the PA rise.
 
What will they tax next?

The very rich and the rich will be little affected

Labour will go for the middle class, (if that description is still valid) - this is always the group of a big tax take - they will increase CGT by increasing the rate of tax payable, IHT will then be a target as they reduce the main residence nil-rate band and Reeves will attack pensions and may even reduce or limit the 25% tax-free lump sum and change legislation to cancel the passing on of your pension pot IHT free.

These are "easy" hits for them, and as such are in line with their dogma and they will hit many people who did not vote for them, (they will look at the demographics of who voted in the Election and hit the people who did not vote for them)

How can we expect the country not to be divided - only around 60% of the population voted and only 34% of the people who voted, voted Labour - so in simple terms only 20% of the UK population supported Labour at the Election ......... so how can we expect there to be any acceptance of the Government policies.

It is all very worrying and a dismal reflection of our political system - without stability and consistency there will be no progress

(and before you ask. I don't have the answer, but maybe a change to PR is the only way to prevent these dramatic swings in policy when a Government changes)
 
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AndrewFlannigan said:
There is always an argument against paying tax, whether it is valid or specious.

However, the argument for paying tax is seldom or never heard. I wonder how many people, who don't want to pay tax, think there are government plantations of magic money trees hidden all over Britain?

--- Honestly: there were ten pound notes all over this one, yesterday ---

View attachment 430074
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I don’t object to paying income tax personally, I did it for 42 years of my working life and still get taxed on my private pensions. I agree It’s a vital way of funding government spending… in fact I wouldn’t object if there was a 1% increase that went solely to the NHS to help bail it out of its current state of misery. What is unfair though is the personal allowance not keeping up with inflation and potentially dragging more low paid workers, or pensioners who rely solely on a state pension, into the 20% tax bracket.
 
BillN_33 said:
... but maybe a change to PR is the only way to prevent these dramatic swings in policy when a Government changes)
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I used to be very much in favour but these days I've changed my mind.

For me, the problem with proportional representation is that it's the politicians' wet dream. It locks the parties into power and gives them jobs for life, certainly in the case of the bigger parties (which are already in that mode, to our disadvantage). I'd far rather see compulsory voting and at much shorter intervals. Two years seems to me to be sensible. In my opinion,

I also believe that parliament should be the goalkeeper on the field, not the striker. Professional civil servants should be the people who put forward changes of law and policy and Parliament should be the people who scrutinise and decide whether or not to accept those changes. If we wish to keep two houses in Parliament, then they should be elected alternatively to one another, the intention being to prevent any one group being in a position of overall power for any length of time. I would go further and limit every member of parliament to a single term in each house. We need a constant change of personel to prevent stagnation.

I'm sure that many will find these ideas abhorent. Arthur Wellesley, Duke of Wellington and Prime Minister prior to the time of the first Reform Act thought it abhorent to allow any man, who paid an annual rent of £10 (roughly £930 today), to vote. Times change, however, and like it or not, we need to change with them.
 
Jacqueline Jill Smith, Baroness Smith of Malvern

The Labour Party want to reform the House of Lords, and generally they do not favour that Institution

so what's one of Starmer's first actions

He appoints Jacqui Smith of the husband charging porn videos to her parliamentary expenses plus other more serious transgressions - not an MP voted by the people and in order to get her "onboard" appoints her to The House of Lords - she is now Jacqueline Jill Smith, Baroness Smith of Malvern.

If it's good for David Cameron it's good for Sir Keir Starmer

We had Tory sleeze by the bucket load ........ now what's coming from Labour?

you just couldn't make it up - what a state the country is in
 
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