State pension and tax

Pollycat

FOREVER21 wrote: »

Pollycat----

Please accept my apology . I'm having trouble with my glasses. Should have gone to Specsavers!!!

Regards

Malc.

Certainly should have.
They give 25% off glasses for over 60s - which is relevant to this thread I guess. :rotfl:

Apology accepted.

mumps

After 40 years doing payroll I have found that the majority of people don't fully understand tax and taxable benefits, even the people who think they do.

I don't understand why people are so shocked that the OP thought his SRP was tax free, lots of benefits are. DLA, AA, IIB to name just three of the state benefits that are tax free. As I said earlier there are other work based pension payments that are tax free. So the OP made a mistake, who hasn't?

mumps

seven-day-weekend wrote: »

I took Kuepper's comment to mean that he doesn't know anyone on State Pension who pays tax, not that he doesn't know anyone who paid tax whilst they were working.

It depends on the circles you move in. I know as many Pensioners who pay tax as those who don't (in fact probably slightly more).

Is it something people talk about, I don't know the tax position of my friends, well other than friends at work and I know all about their tax position but if I am honest I don't think about it when I am not at work.

Oblivion

mumps wrote: »

After 40 years doing payroll I have found that the majority of people don't fully understand tax and taxable benefits, even the people who think they do.

I don't understand why people are so shocked that the OP thought his SRP was tax free, lots of benefits are. DLA, AA, IIB to name just three of the state benefits that are tax free. As I said earlier there are other work based pension payments that are tax free. So the OP made a mistake, who hasn't?

I have never understood why the state pension is paid gross. The DWP is just another payroll provider so why don't they deduct tax at source just like any other payroll provider has to? Wouldn't it simplify things?

jem16

mumps wrote: »

I don't understand why people are so shocked that the OP thought his SRP was tax free, lots of benefits are. DLA, AA, IIB to name just three of the state benefits that are tax free.

I'm not shocked that the OP doesn't realise that the state pension is taxable. In fact it's very understandable given that it's paid gross like all state benefits but is taxable unlike some benefits.

What I find shocking, however, is the constant misuse of the word scam to mean "anything I don't understand".

There are many scams around at the moment in the pension world but I'm afraid that taxation of the state pension isn't one of them.

jem16

Oblivion wrote: »

I have never understood why the state pension is paid gross. The DWP is just another payroll provider so why don't they deduct tax at source just like any other payroll provider has to?

All state benefits are paid gross, some are taxable and others aren't. Many are below the tax-free allowance so if paid on their own wouldn't always be taxable.

Wouldn't it simplify things?

Probably not as it would be yet another income source for HMRC to sort out tax code wise. At least the way it's done, anyone with a private pension plus a state pension would just need one tax code.

le_loup

mumps wrote: »

I don't understand why people are so shocked that the OP thought his SRP was tax free, lots of benefits are.

I'm shocked that you think SRP is a benefit. As far as I'm concerned, it's a return of my contributions, just like my private pension. Or is that a benefit too.

jem16

le_loup wrote: »

I'm shocked that you think SRP is a benefit. As far as I'm concerned, it's a return of my contributions,

It's known as a contributory benefit.

http://www.hmrc.gov.uk/ni/intro/benefits.htm

just like my private pension. Or is that a benefit too.

No nothing like it at all.

Pollycat

jem16 wrote: »

I'm not shocked that the OP doesn't realise that the state pension is taxable. In fact it's very understandable given that it's paid gross like all state benefits but is taxable unlike some benefits.

What I find shocking, however, is the constant misuse of the word scam to mean "anything I don't understand".

There are many scams around at the moment in the pension world but I'm afraid that taxation of the state pension isn't one of them.

Jem
you took the words right out of my mouth. :T

mumps

le_loup wrote: »

I'm shocked that you think SRP is a benefit. As far as I'm concerned, it's a return of my contributions, just like my private pension. Or is that a benefit too.

Well it is a benefit and no your private pension isn't a benefit in fact it is a private pension.