Income tax and pensioners
Comments
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Grumpy_chap said:Jeremy535897 said:the triple lock still only delivered inflation (a bit less in fact). Then tax on some of the increase reduces the impact on net income further.
An employee receiving an inflation-linked pay rise may move into a different tax band as a result so the increase in nett income is below inflation.0 -
geordiejon said:Exodi said:Jeremy535897 said:Albermarle said:dog_nanny said:Thanks for all the replies. I'll just wait and see what happens later next year. Mum's not hard up but she'll probably be very annoyed if she does get a tax bill, no matter how small!
Maybe tell your Mum she is only having to pay a bit in tax, because her pension has gone up so much in the last couple of years. It is not strictly true as the freezing of personal allowances has played its part as well, but perhaps do not remind her of that and she may be less annoyed !
When inflation surged in 2022-2023, pensions enjoyed a 10.1% increase on account of inflation. When workers wagers increased in response to that inflation in 2023-2024, pensioners were able to double dip and enjoy a 8.5% increase on account of worker pay rises (this doesn't even include the fact that this increase was calculated during a month which included one off bonuses, with the actual average earnings increase at the time being 7.8%).
I don't know many workers that received a cumulative 19.5% increase over the last two years, personally I find it quite hard to sympathise with. Income tax bands are frozen for everyone, it's a first world problem if ones income is increasing by so much they're worried about the increased tax liability.
(obviously not likely to be a popular opinion on a forum with over 40% retired).
£35,000 at 4.5% so don't have a go at people who are on the lowerer end of the pay scale and work on figures.
I don't know how pointing out the inherent unsustainability of the triple lock (something most people are aware of) is "having a go at people who are on the lowerer [sic] end of the payscale"... I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension, your whole point seems be created from emotion rather than reasoning. Again, I could apply the same logic as you and (as you state £35k to refer to the average worker) point out that I find it quite selfish to suggest that workers, many who have seen a meaty increase to their mortgage/rent costs while supporting a family during a cost of living crisis, should be happy with a 4.5% increase while simultaneously being on the hook for eye-watering pension increases. Why are you having a go at people that are working?
But if your justification is that £10,600 x 10.1% = £1,070.60 whereas £35,000 x 4.5% = £1,575... and £1,575 > £1,070.60... then I don't think arguing sense and logic matters.Know what you don't0 -
I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension,
But do remember that pensioners pay tax.....
One pensioner of my acquaintance has a state pension which increased to a little over £10,000 a year.
However, this now means that she is paying tax on a very modest occupational pension of under £3000 a year.....
The government giveth and the government taketh away.....
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xylophone said:I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension,
But do remember that pensioners pay tax.....
One pensioner of my acquaintance has a state pension which increased to a little over £10,000 a year.
However, this now means that she is paying tax on a very modest occupational pension of under £3000 a year.....
The government giveth and the government taketh away.....
Collection was by DC assessment, payable in four equal instalments.
Hopefully we are not going back to that.2 -
Ferro said:xylophone said:I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension,
But do remember that pensioners pay tax.....
One pensioner of my acquaintance has a state pension which increased to a little over £10,000 a year.
However, this now means that she is paying tax on a very modest occupational pension of under £3000 a year.....
The government giveth and the government taketh away.....
Collection was by DC assessment, payable in four equal instalments.
Hopefully we are not going back to that.1 -
sheramber said:Ferro said:xylophone said:I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension,
But do remember that pensioners pay tax.....
One pensioner of my acquaintance has a state pension which increased to a little over £10,000 a year.
However, this now means that she is paying tax on a very modest occupational pension of under £3000 a year.....
The government giveth and the government taketh away.....
Collection was by DC assessment, payable in four equal instalments.
Hopefully we are not going back to that.Still, even with that, a DC assessment would be necessary.0 -
Ferro said:sheramber said:Ferro said:xylophone said:I mean aside from the obvious fact you don't have to be poor to be entitled to the state pension,
But do remember that pensioners pay tax.....
One pensioner of my acquaintance has a state pension which increased to a little over £10,000 a year.
However, this now means that she is paying tax on a very modest occupational pension of under £3000 a year.....
The government giveth and the government taketh away.....
Collection was by DC assessment, payable in four equal instalments.
Hopefully we are not going back to that.Still, even with that, a DC assessment would be necessary.
All the different tax rates as well and no computers!0 -
I'm old enough to remember DC assessments, as well as surtax, earned income relief etc. but mostly dealing with post within 14 days of receipt.0
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mybestattempt said:I'm old enough to remember DC assessments, as well as surtax, earned income relief etc. but mostly dealing with post within 14 days of receipt.
The endless acronyms, WEIA, GCD, NAD, NNL, ANZ, etc0 -
Ferro said:mybestattempt said:I'm old enough to remember DC assessments, as well as surtax, earned income relief etc. but mostly dealing with post within 14 days of receipt.
The endless acronyms, WEIA, GCD, NAD, NNL, ANZ, etc0
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