State pension

jeannieblue

I’ve not been on here for years, so please bear with me if I’ve chosen the wrong category! I started to receive my state pension when I was 61 which is just over 10 tears ago now. I’ve continued to work as I can’t have a good quality of life on that amount, or survive even! What I resent is the fact I have to pay tax on it! Surely I paid tax to earn the pension? Feel like I’m being taxed twice! Today I received notification of my new tax code. Well it has spurred me on to see if I can do anything about this! 

booneruk

Well, you're not paying national insurance so that's one thing

"Rich" pensioners do pay income tax though. If your total earnings are <50k then you're only paying basic rate on income above £12,570. I'm sure someone will be along to talk about your options for paying less tax, be it further pension saving, VCTs etc.

Dazed_and_C0nfused

jeannieblue said:

I’ve not been on here for years, so please bear with me if I’ve chosen the wrong category! I started to receive my state pension when I was 61 which is just over 10 tears ago now. I’ve continued to work as I can’t have a good quality of life on that amount, or survive even! What I resent is the fact I have to pay tax on it! Surely I paid tax to earn the pension? Feel like I’m being taxed twice! Today I received notification of my new tax code. Well it has spurred me on to see if I can do anything about this! 

Realistically the only thing you can do if you want to avoid paying tax is reduce your hours or stop work.

State Pension is taxable income and there is no prospect of that changing.

Ms_Chocaholic

Do you live alone? Would you be better off not working and possibly receiving help with CT etc.

Dazed_and_C0nfused

booneruk said:

Well, you're not paying national insurance so that's one thing

"Rich" pensioners do pay income tax though. If your total earnings are <50k then you're only paying basic rate on income above £12,570. I'm sure someone will be along to talk about your options for paying less tax, be it further pension saving, VCTs etc.

But for most people, who will be making contributions using the RAS method, extra pension contributions don't reduce the amount of tax you pay on your earnings/pension income.

VCT's are a valid option but definitely at the high risk end of the spectrum.