Query about State Pension Application

seven-day-weekend

My husband yesterday applied for his State Pension by phone.

They asked him if he intended working after he has drawn his pension.

Why did they ask this?, I didn't think it made any difference to your pension. (He isn't thinking of working, but just wondered).

FYI, he took early retirement in 2004 and receives a Teachers' pension, and a small amount of Incapacity Benefit.

I've also posted this on the Benefits board as I was not sure which was correct.

Thanks for any advice.

dzug1

Could be to do with tax?

oscarward

My brother recently reached state pension age but has continued working, he told me that they don't tax the pension but change the tax code so you lose it off the other income.

seven-day-weekend

Thanks, I thought it might be something to do with tax, just wanted to make sure.

He already pays tax on his Teachers' Pension, so now will just have to pay a bit more.

JohnB47

seven-day-weekend wrote: »

Thanks, I thought it might be something to do with tax, just wanted to make sure.

He already pays tax on his Teachers' Pension, so now will just have to pay a bit more.

Yes, if his Teachers pension income uses up all of his tax allowance, he'll pay 20% tax on all of his State Pension income. Assuming he's a basic rate tax payer. Not too bad, considering that the payments he made towards his state pension weren't taxed.

yangptangkipperbang

JohnB47 wrote: »

Yes, if his Teachers pension income uses up all of his tax allowance, he'll pay 20% tax on all of his State Pension income.

Yes and no...............

Your State Pension is always paid gross - but the amount is added to any other income you have, for tax purposes. If your total income exceeds your personal allowance then any tax due is taken at source from (usually) the largest other source of income.
I have 4 pensions. State pension is paid gross, two others are taxed at basic rate (20%) and the largest one has my personal allowance set against it and the tax that is due is taken at source from this pension.

seven-day-weekend

Yes, his Personal Allowance is set against his Teachers' Pension. His IB is paid gross, as will be his State Pension (although they are both a taxable Benefit) and the tax taken from his TP. It will just be more tax, however

anmarj

it will be about ni conts after state pension age, as an exemption certificate will be need and they will send out as it is not automatic.

whitesatin

I receive my state pension gross but now I pay more on my Teacher's Pension. Roughly, I pay £1200 tax in total now.

seven-day-weekend

whitesatin wrote: »

I receive my state pension gross but now I pay more on my Teacher's Pension. Roughly, I pay £1200 tax in total now.

I hope that is not per month:eek::eek::eek:

JohnB47

yangptangkipperbang wrote: »

Yes and no...............

Your State Pension is always paid gross - but the amount is added to any other income you have, for tax purposes. If your total income exceeds your personal allowance then any tax due is taken at source from (usually) the largest other source of income.
I have 4 pensions. State pension is paid gross, two others are taxed at basic rate (20%) and the largest one has my personal allowance set against it and the tax that is due is taken at source from this pension.

Hmmm. I think what I said lines up exactly with what you said.:)