Lies about income tax on state pension on Sky News Kay Burley

Pankow2024

MP Mel Stride said in an interview with Kay Burley (56sec into the interview on 8 April 2024) that no pensioner reliant on a state pension would be paying income tax. This is simply not true as my 80yr old widowed mother in law does. She has no other pension. As she explains it, with some difficulty she paid on my father in laws stamp and worked part time much of her life until retirement age.

I emailed Stride, Kay Burley and my MP Michelle Donelan (yes that one we paid her £34k libel fees, more than she fessed up to). She has just come back to me stating that it was right - no state pensioner should be paying tax. However, it is clearly possible that some pensioners on a state pension alone will pay tax. Am I going mad? Paying the tax is not an issue unless it really shouldn't be paid, but it is the sweeping generalisation and lies that they are looking after state pensioners.

Torry_Quine

You're right. 

DE_612183

I think the phrase you need to look at is "solely reliant"

If they only have state pension, then they will be under the threshold to pay tax.

If the have OTHER income, then they will of course pay tax depending on how much they have over the 12750 or whatever it is.

DE_612183

Have you checked her personal tax account with HMRC?

That will tell you where / why she is being taxed.

flaneurs_lobster

Mel Stride is the Secretary of State for Work and Pensions so he should know something about the subject.

I hope you're not suggesting that a Minister of The Crown might be telling porkies?

JoeCrystal

It is correct under the current state pension regime (for now). However, one can potentially get the maximum payout of £169.50 (Basic) plus (SERPS/S2P) of £218.39 per week, which adds up to £387.89 per week (under old rules) (and that does not take into account potentially inherited SERPS from spouses), so indeed, it is quite possible and indeed expected for these state pensioners to pay income taxes.

The trouble is that since they rely solely on the state pension, which is paid gross, they need to set aside the amount of taxes they expect to pay to HMRC at some point.

molerat

Anyone solely on the state pension will not pay tax as the personal allowance is £12570 with the old state pension at £8814 pa and the new state pension at £11502.40 pa so what was stated is correct.  Someone receiving some of the various of additional state pensions or protected payments could well be paying tax.

Silvertabby

DE_612183 said:

I think the phrase you need to look at is "solely reliant"

If they only have state pension, then they will be under the threshold to pay tax.

If the have OTHER income, then they will of course pay tax depending on how much they have over the 12750 or whatever it is.

Wrong.  That may be the case for those under the new pension scheme, ie capped at £11,500 and so under the PA limit of £12,570, but it's certainly not true for those who retired under the old scheme.

For those, the basic State pension plus SERPS/SP2 could be as much as £330 per week.  Even more, if they also deferred under the old, much more generous, rate of 10% per year.  Or have inherited spousal benefits, which are no longer a thing under the new rules. 

Even the much more common 'old' pension of £250 per week is over the current PA limit. 

The "Solely reliant on either just the old basic pension rate or the nSP" would be more accurate.

Marcon

DE_612183 said:

I think the phrase you need to look at is "solely reliant"

If they only have state pension, then they will be under the threshold to pay tax.

If the have OTHER income, then they will of course pay tax depending on how much they have over the 12750 or whatever it is.

Not necessarily. The 'old' state pension wasn't just the basic state pension, but potentially had Graduated Retirement Benefit, SERPS, or State Second Pension on top. That combination could, and in quite a few cases does,  take them into tax-paying territory.

flaneurs_lobster said:

Mel Stride is the Secretary of State for Work and Pensions so he should know something about the subject.

One would hope so... hopefully OP will write again to their MP again and point out the above.

SacredStephan

My late FIL had a state pension of £16738 (=£321pw) in the 22/23 tax year.

On the coding notice it is described as State Pension.

Mel Stride has previous form for inaccurate statements on live TV.

hugheskevi

So a correct and comprehensive statement would be something like "A pensioner solely reliant on the standard rate of the new State Pension with a standard Tax Coding who has not deferred their pension, inherited any pension, or transferred part of their Personal Allowance to their partner should not pay income tax."

Granted some of the caveats are redundant given the previous wording, but many people wouldn't understand solely reliant so you really need to go into the more common scenarios to avoid questions arising.

But, you have to give some leeway for spoken interviews - covering all contingencies is going to make the interview unintelligible to most people, particularly where the audience is the general public and not expected to be familiar with all the possible nuances. So maybe "A pensioner solely reliant on the standard rate of the new State Pension with a standard Tax Coding should not pay income tax" would be the appropriate balance between brevity and accuracy.