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Understanding tax code re: pension
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Nomunnofun1 said:ceewash said:I understand the tax is taken from my teacher's pension but don't understand the tax code.
State pension is £9012 and Teacher's pension £8241.For example, did you start receiving your state pension mid-November 2024, receiving c£3585 up to 5th April?0 -
molerat said:The state pension is taxable income but paid gross. That amount is deducted from your tax free amount, the remaining tax free amount is then set against your other income.As an example. £12570 personal allowance, £10000 state pension, £10000 other pension. £20000 - £12570 = £7430 taxable.Your £10000 state pension is paid gross and your tax allowance is reduced to £2570 and set against your £10000 other pension. £10000 - £2570 = £7430 taxed.Is that £9012 a full year pension ? If so have you not looked at the possibility of increasing it ?molerat said:The state pension is taxable income but paid gross. That amount is deducted from your tax free amount, the remaining tax free amount is then set against your other income.As an example. £12570 personal allowance, £10000 state pension, £10000 other pension. £20000 - £12570 = £7430 taxable.Your £10000 state pension is paid gross and your tax allowance is reduced to £2570 and set against your £10000 other pension. £10000 - £2570 = £7430 taxed.Is that £9012 a full year pension ? If so have you not looked at the possibility of increasing it ?0
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ceewash said:Nomunnofun1 said:ceewash said:I understand the tax is taken from my teacher's pension but don't understand the tax code.
State pension is £9012 and Teacher's pension £8241.For example, did you start receiving your state pension mid-November 2024, receiving c£3585 up to 5th April?1 -
ceewash said:molerat said:The state pension is taxable income but paid gross. That amount is deducted from your tax free amount, the remaining tax free amount is then set against your other income.As an example. £12570 personal allowance, £10000 state pension, £10000 other pension. £20000 - £12570 = £7430 taxable.Your £10000 state pension is paid gross and your tax allowance is reduced to £2570 and set against your £10000 other pension. £10000 - £2570 = £7430 taxed.Is that £9012 a full year pension ? If so have you not looked at the possibility of increasing it ?1
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p00hsticks said:ceewash said:molerat said:The state pension is taxable income but paid gross. That amount is deducted from your tax free amount, the remaining tax free amount is then set against your other income.As an example. £12570 personal allowance, £10000 state pension, £10000 other pension. £20000 - £12570 = £7430 taxable.Your £10000 state pension is paid gross and your tax allowance is reduced to £2570 and set against your £10000 other pension. £10000 - £2570 = £7430 taxed.Is that £9012 a full year pension ? If so have you not looked at the possibility of increasing it ?1
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State pension started in November 2024.0
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I'm afraid you've lost me. Please bear with. Can someone explain what they mean by the pro rata amount. The 2 amounts for my state pension and teacher's pension are the annual amounts. Not part year.0
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ceewash said:I'm afraid you've lost me. Please bear with. Can someone explain what they mean by the pro rata amount. The 2 amounts for my state pension and teacher's pension are the annual amounts. Not part year.
So a part year State Pension and full year teachers pension is within your Personal Allowance. But from April 2025 you can expect to start paying tax as your pension income will be ~£18k/year.0 -
ceewash said:I'm afraid you've lost me. Please bear with. Can someone explain what they mean by the pro rata amount. The 2 amounts for my state pension and teacher's pension are the annual amounts. Not part year.You will soon receive a tax code for 2025/26.Your personal allowance will be reduced by your state pension, for example £9500, leaving 3070 available which converts to a tax code of 307L to be operated against your teachers pension.0
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Thank you all. ThinkI've got it now. I will try again to buy back missing years.0
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