State Pension Annual Increase

proton5

The increase to next year’s state pension has been decided ( late October)  Why do DWP pay me last year’s rate in the first payment of the new tax year when they have 5 months to implement it (doable even if it has to be pro - rated). What’s worse they tell HMRC I have received all payments in the tax year at the new rate so I am underpaid pension and over-taxed on it.

TheMilkmansDad

because it's paid in arrears?

luvchocolate

Don't count your chickens we have a budget before then

Rodders53

https://forums.moneysavingexpert.com/discussion/6347623/state-pension-annual-increase-date/
and
https://forums.moneysavingexpert.com/discussion/6451991/hmrc-charging-excess-tax-for-state-pensioners

are just two of a number of older similar questions/observations that have been answered previously.

FrugaiMacDugal

If you do a tax return here are the HMRC rules.

Box 8 State Pension

Use the letter ‘About the general increase in benefits’ that the Pension Service sent you to find your weekly State Pension amount.

Add up the amount you were entitled to receive from 6 April 2024 to 5 April 2025 and put the total in box 8.

For tax purposes, the correct amount is always the figure of weekly entitlement not the number of payments you received, so this will be the first week at the old weekly pension rate, plus 51 weeks at the new weekly pension rate

Example

If your old weekly pension was £90 and your new weekly pension is £100 (amounts used for illustrative purposes only):

• First week at £90 = £90

• 51 weeks at £100 = £5,100

• Put in box 8 £5,190

pinnks

The increase is applied to your first benefit week that starts on, or after, the first Monday of the tax year.

badmemory

I have been getting my state pension for 13 years now.  Every single year they notify HMRC that I get 52 weeks at the new rate when in actual fact it is one week at the old rate & 51 weeks at the new.  It is getting way beyond irritating now.  It wasn't too bad when when I filed self assessment but they now force me to accept simple assessment & it means having to contact them every time.  Then they wonder why the phone lines are always so busy.

FrugaiMacDugal

badmemory said:

I have been getting my state pension for 13 years now.  Every single year they notify HMRC that I get 52 weeks at the new rate when in actual fact it is one week at the old rate & 51 weeks at the new.  It is getting way beyond irritating now.  It wasn't too bad when when I filed self assessment but they now force me to accept simple assessment & it means having to contact them every time.  Then they wonder why the phone lines are always so busy.

Have a look at your Tax Code Notice that you get yearly from HMRC.

Check the 'Less State Pension' figure, think you'll find that it's 1 x old weekly amount and 51 x new weekly amount.

molerat

FrugaiMacDugal said:

badmemory said:

I have been getting my state pension for 13 years now.  Every single year they notify HMRC that I get 52 weeks at the new rate when in actual fact it is one week at the old rate & 51 weeks at the new.  It is getting way beyond irritating now.  It wasn't too bad when when I filed self assessment but they now force me to accept simple assessment & it means having to contact them every time.  Then they wonder why the phone lines are always so busy.

Have a look at your Tax Code Notice that you get yearly from HMRC.

Check the 'Less State Pension' figure, think you'll find that it's 1 x old weekly amount and 51 x new weekly amount.

Correct for the coding ....... but ....... in any calculation the 52x new rate is used, look at your list of income sources / amounts.