Not a full state pension plus a private pension

QrizB

badmemory said:

It will probably take several decades before the basic state pension reaches the current personal allowance ... 

The basic state pension is £9175.40 a year, expected to rise to £9614.80 for 2026/27.

If it only increases by the 2.5% triple-lock underpin, it'll exceed the current personal allowance after 12 more years.

If it increases by an average of 3.5%, it'll get there in 8 years.

Silvertabby

QrizB said:

badmemory said:

It will probably take several decades before the basic state pension reaches the current personal allowance ... 

The basic state pension is £9175.40 a year, expected to rise to £9614.80 for 2026/27.

If it only increases by the 2.5% triple-lock underpin, it'll exceed the current personal allowance after 12 more years.

If it increases by an average of 3.5%, it'll get there in 8 years.

Most of those on just the old basic State pension will have a contracted out occupational pension on top, so the question of being tax exempt won't apply.

badmemory

I was 30 before my employer offered pensions to women (& that was a univeristy) & many women had their employer talking them out of even paying a full stamp because it saved the employer money.

JoeCrystal

badmemory said:

I was 30 before my employer offered pensions to women (& that was a univeristy) & many women had their employer talking them out of even paying a full stamp because it saved the employer money.

Are you sure about that? I thought the employer are still liable to pay the full rate regardless of the choice made by the women. Or it is the fact someone in payroll expected that all married women should pay small stamps anyway (rather than saving money for the employer). You be surprised how much influence the girl in payrolls often have on influencing the employees when it's coming to making decisions. 

kempiejon

rightfoot_shifter said:

My wife is turning 70 this year, she has a civil service pension but only a partial state pension because she refused to fund more into it when she finished in the civil service at age 40. So her total pension comes just above the current income tax threshold for paying tax. With the current government plans to ensure pensioners solely on full state pension never having to pay income tax, this has posed us a question of how the circumstances would affect my wife's tax liability in the coming years. 

At some point in the future her total pension before tax will likely be less than those on just the full state pension, yet is she still going to be liable to tax above the threshold? Can anyone suggest some options that would mitigate her taxation burden, once her total pension is less than those on just full state pension?

If she has not previously done so there's the option to pause the state pension, but only once. If this would bring the total income to below personal allowance there will be no tax. Annoyingly this builds the pension amount by 5% so re-starting it probably increases the tax burden in the future. 

badmemory

Would you believe that there are still some women still paying the married woman's stamp.  Not many but one is one too many.

QrizB

After seven days and three pages the OP hasn's come back to this thread

Silvertabby

JoeCrystal said:

badmemory said:

I was 30 before my employer offered pensions to women (& that was a univeristy) & many women had their employer talking them out of even paying a full stamp because it saved the employer money.

Are you sure about that? I thought the employer are still liable to pay the full rate regardless of the choice made by the women. Or it is the fact someone in payroll expected that all married women should pay small stamps anyway (rather than saving money for the employer). You be surprised how much influence the girl in payrolls often have on influencing the employees when it's coming to making decisions. 

Peer pressure in general?  Back in the early 1970s, two married colleagues took great glee in boasting to us singlies about how much more they had in their pay packets, and what they were going to buy with it.  When my friend returned from honeymoon, they were to first to tell her to get herself down to HR, and 'get her money back'.

She told them she had looked into it, and the saving wasn't worth the loss of a State pension in her own right.  They just laughed at her, and called her stupid for turning down 'free' money.  Bet they are not laughing now.

HedgehogRulez

QrizB said:

After seven days and three pages the OP hasn's come back to this thread

Probably ashamed

Qyburn

rightfoot_shifter said:

... With the current government plans to ensure pensioners solely on full state pension never having to pay income tax ..

What the budget actually said was, note the bits I have put in bold ..

"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."

Note they say they'll ease the "administrative burden", rather than the tax burden. And they say pensioners won't have to pay "small amounts of tax via simple assessment".  In other words they could have said "won't pay tax" if that's what was meant.