Wasn't warned about this catch.

[simongt]

When I reached 65, I decided to carry on working as I was enjoying what I was getting paid for and the extra five years I did would enhance my state pension.
However, after a couple of 'unpaid tax' demands form the HMRC this year, it transpires that my state pension 'extra amount' has put me rather above the personal allowance limit, so now I'm getting charged tax on the extra pension I worked another five years for - !
Apparently it's termed 'fiscal drag' because the persona allowance rate isn't keeping up with the increase in state pension.
I shall be 'phoning HMRC tomorrow to see if there's a way they can alter the tax rate on my pension bit so we both don't have to waste time & effort in making the calculations.

 

[Chislenko]

When I reached 65, I decided to carry on working as I was enjoying what I was getting paid for and the extra five years I did would enhance my state pension.
However, after a couple of 'unpaid tax' demands form the HMRC this year, it transpires that my state pension 'extra amount' has put me rather above the personal allowance limit, so now I'm getting charged tax on the extra pension I worked another five years for - !
Apparently it's termed 'fiscal drag' because the persona allowance rate isn't keeping up with the increase in state pension.
I shall be 'phoning HMRC tomorrow to see if there's a way they can alter the tax rate on my pension bit so we both don't have to waste time & effort in making the calculations.

Same for everyone, just had a demand for an extra £1350 in top of what has already come out in PAYE. Hence, to link two threads, why I keep the maximum in Premium Bonds.

 

[midlife]

Yep, I start drawing my state pension in 6 days time and that will trigger almost another £5k in tax per year.

 

[Profpointy]

Yep, I start drawing my state pension in 6 days time and that will trigger almost another £5k no in tax per year.

To be fair that is a pretty comfortable retirement if your pension is enough to put you well into the higher tax bracket

 

[Drago]

Ive still a way to go to my state pension and my existing pensions would put me in the higher tax bracket

Thankfully largest of the two, the injury pension, is tax free, so only the basic dibble pension qualifies for income tax so I don't pay a great deal, and no NI, and no student loan repayments

 

[ebikeerwidnes]

We get our state pension ina few months and both of use will pay tax on it

for me it will all be taxed - my wife - just some of it

but that is OK - it is because I have a "not too bad" pension so the total is over the limit

after all - I can;t moan about them not doing enough if I try to fiddle the tax so they have less money to d things with!

 

[Drago]

And you dont efen escape their clutches when youre dead!

 

[ebikeerwidnes]

And you dont efen escape their clutches when youre dead!

I can

the people who get my money might not be able to - but they can;t get me!

 

[fossyant]

Tax and death are the only certainties in life. I suspect I'll get hit for big tax when I retire, but hey ho, you are lucky (ok... wise) to be in that situation.

You could have been on benefits all your life with cheap housing and a full pension... but that's not for here !

 

[PaulSB]

We get our state pension ina few months and both of use will pay tax on it

Sorry to choose your post ebiker but it's the appropriate one. The suggestion the state pension is taxable is something which really winds me up.

The state pension is not, currently, taxable as it is below the tax threshold. Other income which one has is taxable if one goes above the tax threshold. I receive the state pension plus a SERPS pension. The SERPS element is taxable.

In the OP's situation the state pension income is taxable but that's because delaying takes him above the threshold. This is far from the norm.

 

[Drago]

I can

the people who get my money might not be able to - but they can;t get me!

Get married. Even if its only a marriage of convenience it helps keep the taxman at bay.

I wonder how long a tax avoidance thread would last....? (Kidding!)

 

[ColinJ]

The suggestion the state pension is taxable is something which really winds me up.

I only have a tiny private pension (around £600 p.a.) but even that is now enough on top of the state pension to make me a taxpayer again!

 

[midlife]

To be fair that is a pretty comfortable retirement if your pension is enough to put you well into the higher tax bracket

I am still working full time as well as about to draw my state pension.

After paying NI since 1982 I decided to take my state pension in case I croak. lol.

 

[ebikeerwidnes]

Sorry to choose your post ebiker but it's the appropriate one. The suggestion the state pension is taxable is something which really winds me up.

The state pension is not, currently, taxable as it is below the tax threshold. Other income which one has is taxable if one goes above the tax threshold. I receive the state pension plus a SERPS pension. The SERPS element is taxable.

In the OP's situation the state pension income is taxable but that's because delaying takes him above the threshold. This is far from the norm.

True if you look at it that way

i.e. if you stat with the OAP then add on the otehr bits after

but i have been getting the "other bits" for 7 year (or is it 8??) so the OAP seems to me like and extra income starting now
hence it feels like it is an addon to the current pensions

hence it feels like it is taxed and some of the otehr ones is the tax free bit at the bottom

If I started to look at it from scratch now it would feel different

or if I was retiring on same day as it started


but as it is it feels like it is taxed

all works out the same anyway

 

[MontyVeda]

I only have a tiny private pension (around £600 p.a.) but even that is now enough on top of the state pension to make me a taxpayer again!

but you'll be paying very very little in income tax.