"Average Earnings Growth" and triple lock

Silvertabby

onomatopoeia99 said:

JoeCrystal said:

So basically anyone with high SERPs/2SP and deferred as it's only source of income is going to be a winner. Silvertabby's friend must be so happy at the moment if it is only source of income! 😁

No, the budget document says "with no increments" so any of those things you list get you excluded from the income tax exemption.

But what people are picking up on is what Rachel Reeves said to Martin Lewis - ie, that 'those on just the State pension won't pay tax'.

WE know what she said isn't what she meant - but she'll still have to do some backtracking to knock this rumour on the head !

MeteredOut

BlackKnightMonty said:

Rachel Reeves confirms if you receive the SP only, and it takes you over the personal allowance, you will not have to fill in a self assessment and you will not pay the income tax over the allowance. For the remainder of this parliament.

https://x.com/martinslewis/status/1994166357500346460?s=46&t=wjgj9AHysRwn3YQi4vJFdw

Deep down, I bet you're enjoying the additional bitterness towards pensioners this announcement affords you

I do like the Quadruple Lock name though. You should get a job as a tabloid headline writer.

Dazed_and_C0nfused

SnowMan said:

I agree the budget statement is likely to be what applies in practice

A protected payment in the new state pension is likely to be considered an increment.

Not sure what the basic state pension bit means in the budget statement because if there is no increment that presumably means someone receiving no SERPS or S2P, and then they aren't going to breach the personal allowance from their basic state pension alone in any case.

Perhaps someone whose only other income is £400 say of savings interest will be I guess likely covered because that falls within the 0% rate starter savings rate for savings (and £1,000 savings allowance 0% band). If the interest is higher but still covered by a combination of the starter savings rate for savings 0% band and the 0% rate £1,000 savings allowance then that may or may not be OK. And if someone has dividend income below £500 from some old privatisation shares for example that may be OK.    

But how does that square with the budget reference to sole income?

As ever the devil will be in the detail, further down the line.

Grumpy_chap

Dazed_and_C0nfused said:

Grumpy_chap said:

SnowMan said:

Rachel Reeves has now confirmed to Martin Lewis that someone who is in this situation, that is they have a state pension that takes them over the personal allowance but no other pension, won't during the course of this parliament have to pay the small amount of tax from the state pension moving above the personal allowance in April 2027. 

So someone just over 67 with SP and savings would be better to delay drawing their private pensions?

This is what the Budget announcement said so if those savings generated any taxable income this measure wouldn't appear to apply to them.

It looks increasingly like it could be quite a narrow group of people who will benefit from this.

State Pension and Simple Assessment – The government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28 if the new or basic State Pension exceeds the Personal Allowance from that point. The government is exploring the best way to achieve this and will set out more detail next year.

I wonder how "sole income" will be defined if individuals have savings in ISA's (no tax liability) or savings generating interest below the savings allowance.
Will TFLS / tax-free pension drawdown be classified as income?

It could possibly even make sense for individuals some years into retirement to draw extra pension in 2026-27, particularly if they have uncrystallised funds available that can be drawn tax-free, such that their sole income in 2027 and for a few years until the "no tax on only SP" runs out of steam.

SacredStephan

The Chancellor shouldn't be announcing new policy (or newly made-up policy) on TV/social media before announcing it the House.

jem16

Ayr_Rage said:

JoeCrystal said:

So basically anyone with high SERPs/2SP and deferred as it's only source of income is going to be a winner. Silvertabby's friend must be so happy at the moment if it is only source of income! 😁

The interview by ML of RR to me inferred that it would only apply to the NSP as it was mentioned that the triple lock is predicted to take that over the basic allowance in 2027.

Once again clarification is needed.

Listening to the interview, Rachel Reeves clearly mentioned “once new state pension crosses over the threshold in April 2027” so she was referring to the full new state pension which is currently £230.25pw.

Martin Lewis then totally misrepresented that and told everyone listening to his TV show that “no-one on the state pension alone would have to pay tax.” 

So now we have loads of people who think that no matter how much they receive in state pension, as long as it’s their sole income it won’t be taxed.

Martin has since changed what he’s said and is now saying on Twitter/X and Facebook that it means those on the full new state pension alone will not pay tax. He needs to get back on TV and make that clear to the viewers who heard him say otherwise.

i suspect there will be changes to what Rachel Reeves is claiming once the details have been properly looked at.

jem16

Silvertabby said:

onomatopoeia99 said:

JoeCrystal said:

So basically anyone with high SERPs/2SP and deferred as it's only source of income is going to be a winner. Silvertabby's friend must be so happy at the moment if it is only source of income! 😁

No, the budget document says "with no increments" so any of those things you list get you excluded from the income tax exemption.

But what people are picking up on is what Rachel Reeves said to Martin Lewis - ie, that 'those on just the State pension won't pay tax'.

WE know what she said isn't what she meant - but she'll still have to do some backtracking to knock this rumour on the head !

If you listen carefully Rachel Reeves didn’t actually say that. Those were Martin Lewis’ words. 

Dazed_and_C0nfused

Silvertabby said:

JoeCrystal said:

So basically anyone with high SERPs/2SP and deferred as it's only source of income is going to be a winner. Silvertabby's friend must be so happy at the moment if it is only source of income! 😁

Stand by for another U turn confirming they mean State pensioners on JUST the new single tier State pension.  I really don't think they intend that my friend ('old' State pension of £24K due to high rates of SERPS/SP2 and deferral at the old, much more generous, rate of 10%) should be tax exempt !    

I think they mean both people on the old basic State Pension and the new State Pension.

The with "no increments" bit being a key part of the announcement.

It will just be a while before those on the old basic State Pension get to the point of that being above their Personal Allowance.

It will be interesting to see where Marriage Allowance fits into all this 🤔

SnowMan

Dazed_and_C0nfused said:

SnowMan said:

I agree the budget statement is likely to be what applies in practice

A protected payment in the new state pension is likely to be considered an increment.

Not sure what the basic state pension bit means in the budget statement because if there is no increment that presumably means someone receiving no SERPS or S2P, and then they aren't going to breach the personal allowance from their basic state pension alone in any case.

Perhaps someone whose only other income is £400 say of savings interest will be I guess likely covered because that falls within the 0% rate starter savings rate for savings (and £1,000 savings allowance 0% band). If the interest is higher but still covered by a combination of the starter savings rate for savings 0% band and the 0% rate £1,000 savings allowance then that may or may not be OK. And if someone has dividend income below £500 from some old privatisation shares for example that may be OK.    

But how does that square with the budget reference to sole income?

As ever the devil will be in the detail, further down the line.

The budget document isn't going to spell out precisely what they mean by 'sole income', and if they had said 'sole taxable income' then you get into the it's taxable but at 0% issue.

The difference that is evident is between the budget document that says 'sole income' and Rachel Reeves saying to Martin Lewis no other pension of any kind. 

Applied common sense says that someone with £400 of savings interest, or alternatively a few privatisation shares and just a full new state pension isn't going to be required to have to pay tax through simple assessment. That's the sort of person they are aiming to save from the administration and tax paying issues of the personal allowance falling below the new state pension amount. 

That's just my guess and that's all it can be, and why I used the wording may or may not. So agree the devil will be in the detail. 

Cobbler_tone

Love how everyone gets their knickers in a twist and will be now citing some sound byte, for something that doesn't impact anything for 18 months. Seems like anyone tries to take an opportunity to kick Martin Lewis too, who makes more of a tangible difference to most.
Maybe take the good news (for a band of pensioners) who might get away with a few quid of tax. Trying to twist it into "if you get £24,000 state pension" and being tax exempt isn't what was said, nor would it be basic common sense to assume that.
I am sure there is a lot of work and clarification to be undertaken before it is an issue for anyone.
The way the world of politics moves, you could probably take the majority of the deferred budget measures with a large pinch of salt.

Like the SS, EV charge and tax on state pensions, chill out and wait a while, otherwise you could be too stressed and wound up to see the impacts of any of it! I guess it is the nature of the thirst for instant gratification. They were re-writing the budget in the days running up to it, so they aren't going to have the details yet.