Tax on state pension

Seaquester

because of my annual earnings being high I paid 12.5% NIC contributions lot more than lower income my monthly state pension (the only pension I have ) is £1244 90 pm ,I also get a pension disability allowance .I do not have any other source of income.

Prior to budget the PM stated that no pensioners whose sole income is a state pension will not pay tax on his government pension .

Yet i have just received a tax bill for 2024/25 fo £ 566.93 I am absolutely devastate by this bill.Did anybody else hear the PM state this on tv recently ,and any thoughts advice please

eskbanker

The concession you refer to is being introduced from the 2027/28 year, so doesn't affect income tax in any previous years.

I'm not quite following your figures, could you perhaps share more detail of exactly what's shown in your simple tax assessment calculation?

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/6688414/tax-on-state-pension

Nobody in Government has ever said if your only source of income was state pension then you would pay no tax.

It was only ever going to be those in receipt of the basic state pension and you clearly get more than that - although you say monthly state pension there is no option to receive it monthly. Do you mean 4 weekly.

Edit to add - you already asked this back in December last year.

DRS1

Looks like your income may be too high to benefit from the pensioner tax allowance see here

New Pension(er) Tax Allowance — MoneySavingExpert Forum

Seaquester

hi isthisforreal I beg to differ check the interview the then chancellor rachel reeeves’s interview with Martin Lewis

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82184407#Comment_82184407

It doesn't really matter what the previous chancellor said last year, what counts is what is written into legislation, and that's been clarified today - however, it is, and always has been, clear that the change takes effect from the 2027/28 tax year, not any previous one.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82184407#Comment_82184407

This was the quote:

The Chancellor Rachel Reeves: "So if you just have a State Pension, you don't have any other pension, we are not going to make you fill in a tax return."

She went on to clarify that not filling out a tax return meant not paying the tax, and that it would likely be implemented from 2027.

@Seaquester Given this was a future promise for 2027 made by a Chancellor in November 2025, Im not sure why you were surprised by your tax bill for 2024/2025

SacredStephan

Nobody in Government has ever said if your only source of income was state pension then you would pay no tax.

On 8 April 2024, then Tory Minister Mel Stride was interviewed on Sky News by Kay Burley and stated:

"...that means if you are relying on the state pension alone, of course, you're not going to be paying any tax at all."

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82184426#Comment_82184426

Point taken that it's inaccurate to say that 'nobody ever said it', but comments made by a different government in the previous parliament are even less relevant than those made by Rachel Reeves last year!

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/82184429#Comment_82184429

Still annoyed by Pitt the Younger saying in 1799 that income tax was just a 'temporary measure'.

Brie

To turn the conversation around - are you sure there is nothing else that you can apply for that would boost your income and thus make the tax more affordable? If you are getting SP and a disability allowance can you apply for attendance allowance? A cut in your council tax? And maybe be eligible for a lower tariff for utilities, water, broadband, phone?