State Pension taxable

luvchocolate

As others have said state pension doesn't have tax deducted at source but from your private pension..they will receive your tax code and deduct it

p00hsticks

https://forums.moneysavingexpert.com/discussion/comment/81883239#Comment_81883239

Agreed - DWP don't deal with tax at all and wouldn't know what the OP's other income and tax code is.

Letter 1 from the DWP advising of the increase in State Pension - they will also have passed these details over to HMRC.

Letter 2 from HMRC advising of the resulting tax code.

diveunderthebonnet

My state pension is now above the personal allowance and will be even higher next year when we get the increase ,as i do not draw a private pension it will be interesting to see how they will reclaim the tax ,i know they will have a way but i bet it costs more than the money they get off me.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81883593#Comment_81883593

It's called Simple Assessment.

https://www.gov.uk/government/publications/pensioners-and-tax-communications-materials/simple-assessment-guide-for-pensioners

Flugelhorn

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

yes my whole state pension is taxed at 40%

Aretnap

https://forums.moneysavingexpert.com/discussion/comment/81883728#Comment_81883728

To be pedantic, income tax applies to your total income, not to any specific source of income. If you have, say, a state pension of £10,000 pa, an occupational pension of £30,000, a part time job that pays £15,000 and £5,000 of interest above the PSA then your total income is £60,000 and you are taxed on that figure as a whole.

For convenience HMRC will use the PAYE system to deduct this tax from a combination of your salary and your occupational pension, but it would be wrong to say that there's a particular income source which is taxed at 0%, another which is taxed at 20% and another which is taxed at 40%. That would be to confuse the mechanism by which tax is calculated with the mechanism by which it is collected.

Ibrahim5

How would he know it was taxable if he hadn't received a letter? Surely the government should have sent a letter to everyone who was going to get caught up in state pension taxation.

TadleyBaggie

https://forums.moneysavingexpert.com/discussion/comment/81883946#Comment_81883946

Oh no! It's Waspi all over again.

t0rt0ise

https://forums.moneysavingexpert.com/discussion/comment/81883946#Comment_81883946

Seems they've done exactly that. He has been written to and told as everyone in the same position will have been. What more do you want?

artyboy

…and yet that rather foolish political commitment (saying that no one only receiving state pension would pay tax) still lingers on…