State Pension taxable

LindaCarlton

I have just received 2 letters from DWP, 1 showing how much my State Pension will be from April 2026 and 2. what my tax code will be. They have stated that my State Pension will be ABOVE the personal allowance and therefore £58 of it will be taxed along with my private pension. Has anyone else had this? I understood that the State Pension was NEVER going to be taxed!

Marcon

https://forums.moneysavingexpert.com/discussion/6655235/state-pension-taxable

Misunderstanding I'm afraid.

Time2Go_25

https://forums.moneysavingexpert.com/discussion/6655235/state-pension-taxable

Not sure where you got that understanding from, the state pension has always been taxable

molerat

The difference between kneejerk politician soundbites and what is happening in the real world. RR's "thoughts" are still only that and will not come into effect until 2027 if they ever in fact do. And what they will actually apply to is a whole different conversation - state pension, new state pension, basic state pension ? Politician opens mouth before engaging brain - who'd have thought it !

Ayr_Rage

The state pension is never taxed directly but it counts as income and if it exceeds the personal allowance then that portion is taxable.

That may change in the future (if KS/RR don't u-turn again) but for now your understanding is not correct.

The tax code change means any tax is paid from your private pension, tax is never deducted from the state pension payment.

If affects thousands!

Marcon

…and as OP has other income this won't apply to them (even if it - ever - applies to anyone else): https://www.bbc.co.uk/news/articles/cev8ed9klz1o

Easy to see why OP is bemused…

QrizB

Has anyone else had this?

Yes. Thousands, possibly hundreds of thousands, of people have.

State Pension is a taxable benefit.

Sam_666

Write to your MP and complain.

DRS1

https://forums.moneysavingexpert.com/discussion/6655235/state-pension-taxable

Are you sure letter 2 came from the DWP? More likely from HMRC.

NormalNorman

Check to see if there’s any allowances you can claim to increase your tax code. For example mines £12942. Cheers

dunstonh

 I understood that the State Pension was NEVER going to be taxed!

Your understanding is incorrect. People have been paying tax on the state pension for generations.

The basic state pension was below the personal allowance and NSP is also below the personal allowance (at the moment but getting close). However, if you have Graduated, SERPS or S2P entitlement, then it was very easy to get above the personal allowance.