Pension tax annoyed

the black fox

the black fox

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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.
 
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:
 
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.
 
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