Paying Income Tax on State Pension
Watch this postI would like to know how you feel about paying income tax on your state pension.
Since the new tax year, your state pension will be subject to income tax. This is because the Chancellor did not increase the personal tax allowance in the budget, so now with the increase we were given takes the pension rate above the personal allowance.
So don't go on planning to spend your increase as the tax man wants his share first.
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Obviously, if you have a private pension as well as the state pension then the amounts are added together and the appropriate income tax is deducted from your private pension.
As long as you only have up to the above amount of income in the year 2023 - 2024 do not worry you will pay no tax and the taxman will not be looking for a share of it.
Please note you could also have some Superannuation added to your basic old state pension amount so it will not be the standard pension rate showing of £156.20. Your Final rate of pension will show the Superannuation amount included on the advice letter you get from the Pension Service in March of each year. Bank interest on savings will also need to be taken into account as income. Finally private pensions need to be added to calculate total income for the year end.
Always remember that State Pension is paid 4 weekly and not monthly so you receive 13 payments per annum. Private pensions are usually paid Calendar monthly so if that is the case 12 payments per month will be received.
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