TAX ON FULL STATE PENSION APRIL 2027

QrizB

Exodi said:

 It's an interesting position to be angry that your pay has increased by so much you've been pushed into a new tax bracket).

I look forward to the rapturous approval that will follow when, as part of the forthcoming Budget, the Chancellor announces:

"In response to the strong public feedback received at the prospect of the full New State Pension exceeding the Personal Allowance and becoming liable to income tax, we have decided that all State Pension payments will be capped at the value of the Personal Allowance."

That should make everyone happy, yes?

DRS1

QrizB said:

Exodi said:

 It's an interesting position to be angry that your pay has increased by so much you've been pushed into a new tax bracket).

I look forward to the rapturous approval that will follow when, as part of the forthcoming Budget, the Chancellor announces:

"In response to the strong public feedback received at the prospect of the full New State Pension exceeding the Personal Allowance and becoming liable to income tax, we have decided that all State Pension payments will be capped at the value of the Personal Allowance."

That should make everyone happy, yes?

Especially when she goes on to say that the personal allowance won't be frozen any more but will instead reduce to £6k next tax year and £3k in the following tax year.

german_keeper

DRS1 said:

QrizB said:

Exodi said:

 It's an interesting position to be angry that your pay has increased by so much you've been pushed into a new tax bracket).

I look forward to the rapturous approval that will follow when, as part of the forthcoming Budget, the Chancellor announces:

"In response to the strong public feedback received at the prospect of the full New State Pension exceeding the Personal Allowance and becoming liable to income tax, we have decided that all State Pension payments will be capped at the value of the Personal Allowance."

That should make everyone happy, yes?

Especially when she goes on to say that the personal allowance won't be frozen any more but will instead reduce to £6k next tax year and £3k in the following tax year.

If PTA was reduced I have always wondered how many people would just see the words tax and reduction and think it was a good news story. 

Aylesbury_Duck

german_keeper said:

DRS1 said:

QrizB said:

Exodi said:

 It's an interesting position to be angry that your pay has increased by so much you've been pushed into a new tax bracket).

I look forward to the rapturous approval that will follow when, as part of the forthcoming Budget, the Chancellor announces:

"In response to the strong public feedback received at the prospect of the full New State Pension exceeding the Personal Allowance and becoming liable to income tax, we have decided that all State Pension payments will be capped at the value of the Personal Allowance."

That should make everyone happy, yes?

Especially when she goes on to say that the personal allowance won't be frozen any more but will instead reduce to £6k next tax year and £3k in the following tax year.

If PTA was reduced I have always wondered how many people would just see the words tax and reduction and think it was a good news story. 

Sadly, plenty.  The same people who when told that inflation has reduced, believe that things will become cheaper.  Mind you, I once heard my local radio station begin a news report with "The cost of living is set to fall as inflation has reduced from x to y".

kinger101

Annabee said:

I'd agree with that Exodi. So sick of whining pensioners! (and I'm almost one myself).  They seem to think they should be exempt from tax.

Plus of course, it was the previous Conservative government who froze personal tax allowances, back in 2021. But of course they just don't want to know that. 

There is an issue here though, which can be solved by giving a higher allowance to people of pension age.  Used to exist before.

While many pensioners already pay tax (rightly so) and there is a mechanism to tax those who don't receive a private pension taxable at source, it would essentially become an administrative nightmare to suddenly start issuing tax demands en masse for small amounts of money to millions of pensioners.

Cobbler_tone

When the next lot raise the threshold to £20k it won’t be an issue. 

QrizB

kinger101 said:

...it would essentially become an administrative nightmare to suddenly start issuing tax demands en masse for small amounts of money to millions of pensioners.

There are already hundreds of thousands of state pensioners being issued with tax demands. The system exists and works, it's not an "administrative nightmare".

kinger101

QrizB said:

kinger101 said:

...it would essentially become an administrative nightmare to suddenly start issuing tax demands en masse for small amounts of money to millions of pensioners.

There are already hundreds of thousands of state pensioners being issued with tax demands. The system exists and works, it's not an "administrative nightmare".

Paying HMRC staff to issue tax demands for people entirely on state benefits?  It's inefficient and the optics look bad.  A lot easier just to make sure tax allowance for pensioners covers new state pension.  It already happening for SERPs doesn't mean inefficiency should be scaled.

There were already 1.4 million letters issued for unpaid tax last year as well.  Only some if these will be pensioners, but creating a system which vastly increase the number of people who are not taxed at source is bad design 

Silvertabby

Increasing the personal tax allowance (for State pensioners) so it is on a par with the single tier pension would seem to be the easiest and cheapest solution to this looming problem.  But I can't see Labour adopting a Tory manifesto pledge that they have already dismissed.    

Silvertabby

german_keeper said:

DRS1 said:

QrizB said:

Exodi said:

 It's an interesting position to be angry that your pay has increased by so much you've been pushed into a new tax bracket).

I look forward to the rapturous approval that will follow when, as part of the forthcoming Budget, the Chancellor announces:

"In response to the strong public feedback received at the prospect of the full New State Pension exceeding the Personal Allowance and becoming liable to income tax, we have decided that all State Pension payments will be capped at the value of the Personal Allowance."

That should make everyone happy, yes?

Especially when she goes on to say that the personal allowance won't be frozen any more but will instead reduce to £6k next tax year and £3k in the following tax year.

If PTA was reduced I have always wondered how many people would just see the words tax and reduction and think it was a good news story. 

The number of conversations I had with LGPS members who took umbrage when the LGPS accrual rate was 'reduced' from 1/80th to 1/60th......