State Pension

[steve_b_wales]

I've recently qualified for the above. I intend working for another 12 months, maybe longer. I know that I won't be paying National Insurance anymore, but will pay more tax. Does anyone know the percentage of what will be taken?

[gdadphil]

At your top rate so 20% if not higher earner or 40% if you are. its just lumped into your income

however the HMRC should issue a new tax code highlighting new known income so you pay tax through payroll

it's easier if they do otherwise you will have to do a self assessment at end of 23/24 tax year ( a pain and you'd need to put aside for tax in the interim)

cheers

gdadphil

[steve_b_wales]

2 hours ago, gdadphil said:

At your top rate so 20% if not higher earner or 40% if you are. its just lumped into your income

however the HMRC should issue a new tax code highlighting new known income so you pay tax through payroll

it's easier if they do otherwise you will have to do a self assessment at end of 23/24 tax year ( a pain and you'd need to put aside for tax in the interim)

cheers

gdadphil

Thanks. My tax code now has an 'X' at the end of it. I know that my pension, (£9000+) is taken off my personal allowance as it's classed as income. 

[TOPGUN749]

You will have the state pension added to your other income and will pay 20% tax on everything over £12570 a year,and 40% on anything that goes above about £50,000.

You could have deferred the state pension for a year or more if you wanted to and then you would receive an extra 5.8% for every year deferred,though you end up getting taxed even more.The National insurance of course stops at age 66,which is a positive.

I wouldn’t defer a £10,600 pension myself,because with only a 5.8% gain after a year it would take about 20 years to get that back again.

 

 

Edited April 20, 2023 by TOPGUN749

[benbobailey]

On the subject of pension deferral, although a small annual increase is gained, it will take many many years to catch up on the lost £ 9000 or £10000 per annum. Not usually financially sensible to save a few quid tax.  Although everyone's circumstances are different. Regards 

Edited April 20, 2023 by benbobailey
Error

[Dave at kelton]

From recent experience you will get a new tax code pretty sharply after your pension and tax rates as above for England.

[JohnfromUK]

15 minutes ago, Dave at kelton said:

From recent experience you will get a new tax code pretty sharply after your pension

My new tax code arrived about a week before the first pension payment!

[old'un]

1 hour ago, benbobailey said:

On the subject of pension deferral, although a small annual increase is gained, it will take many many years to catch up on the lost £ 9000 or £10000 per annum. Not usually financially sensible to save a few quid tax.  Although everyone's circumstances are different. Regards 

you can have your deferred pension added to your monthly pension or take it as a lump, that's what I did and got a nice lump sum after two years.

[TOPGUN749]

3 minutes ago, old'un said:

you can have your deferred pension added to your monthly pension or take it as a lump, that's what I did and got a nice lump sum after two years.

And taxed at 20% no doubt,there is no escaping it! 😊

[benbobailey]

8 minutes ago, old'un said:

you can have your deferred pension added to your monthly pension or take it as a lump, that's what I did and got a nice lump sum after two years.

 

[benbobailey]

10 minutes ago, old'un said:

you can have your deferred pension added to your monthly pension or take it as a lump, that's what I did and got a nice lump sum after two years.

That may have been possible in the past but the current situation is considerably less favourable.  For example : if the pension is deferred for 1 year (52 weeks) an addition 5.8% is added to future payments. There is no payment of lump sum for lost pension at any time . In figures in approximate terms....... Lose 1st years pension£10000. Take annual pension the next year at increased rate £10580. In simplistic terms you will take over 17 years to recover the deferred year pension!

[TIGHTCHOKE]

Simply put;

DON'T do it!

[Jaymo]

Take it! You never know what tomorrow brings. 

[Old farrier]

24 minutes ago, Jaymo said:

Take it! You never know what tomorrow brings. 

This ^^^^ 

 

[marsh man]

36 minutes ago, Jaymo said:

Take it! You never know what tomorrow brings. 

I took mine the day it was due and over 10 years later haven't regretted a single day   , a good mate of mine who I used to work with all day and then go out after tea and do more building work went in hospital and died six days before his 65 th birthday .

As for pensions , I have just received a letter from Scottish Widows to inform me my small private pension I got from work was £43.18 gross , it is now £21.59 net pension , so it work out at 50% income tax  and my only income is my state pension . having never been out of work since I left school and never claimed a penny in my life it wouldn't give me any encouragement to work any longer and just keep paying more and more tax .

Here yer go , this was sent 12 / 4 / 23

 

Edited April 20, 2023 by marsh man

[old'un]

40 minutes ago, marsh man said:

I took mine the day it was due and over 10 years later haven't regretted a single day   , a good mate of mine who I used to work with all day and then go out after tea and do more building work went in hospital and died six days before his 65 th birthday .

As for pensions , I have just received a letter from Scottish Widows to inform me my small private pension I got from work was £43.18 gross , it is now £21.59 net pension , so it work out at 50% income tax  and my only income is my state pension . having never been out of work since I left school and never claimed a penny in my life it wouldn't give me any encouragement to work any longer and just keep paying more and more tax .

Here yer go , this was sent 12 / 4 / 23

 

is that tax code correct?

[benbobailey]

48 minutes ago, marsh man said:

I took mine the day it was due and over 10 years later haven't regretted a single day   , a good mate of mine who I used to work with all day and then go out after tea and do more building work went in hospital and died six days before his 65 th birthday .

As for pensions , I have just received a letter from Scottish Widows to inform me my small private pension I got from work was £43.18 gross , it is now £21.59 net pension , so it work out at 50% income tax  and my only income is my state pension . having never been out of work since I left school and never claimed a penny in my life it wouldn't give me any encouragement to work any longer and just keep paying more and more tax .

Here yer go , this was sent 12 / 4 / 23

 

It appears that you have been taxed wrongly. Unless your total taxable earnings this year put you in higher tax bracket. If it doesn't correct itself on next payment slip I suggest you contact HMRC. Or contact them now, I find them helpful at correcting errors. Have all the relevant info, NI number,pension details etc, ready when you call.

[marsh man]

1 hour ago, old'un said:

is that tax code correct?

THANKS for asking but t b h I have never took that much notice when I got my tax code each year as I was on the border line with my state pension being very close to my allowance , it have only been these last two or three years that my small private pension have been going down by a few quid and it wasn't that much to had made a difference on my income , it was only this latest one that made me think that this can't be right by taking exactly half out .

1 hour ago, benbobailey said:

It appears that you have been taxed wrongly. Unless your total taxable earnings this year put you in higher tax bracket. If it doesn't correct itself on next payment slip I suggest you contact HMRC. Or contact them now, I find them helpful at correcting errors. Have all the relevant info, NI number,pension details etc, ready when you call.

Many THANKS for your advice and I will contact HMRC to try and sort it out

No , I no longer have a working income and haven't since I retired just over ten years ago , while I was working I put all my spare money into a Isa each year as any interest was tax free , so it is only now my state pension and the small one from my workplace .

[billytheghillie]

3 hours ago, marsh man said:

I took mine the day it was due and over 10 years later haven't regretted a single day   , a good mate of mine who I used to work with all day and then go out after tea and do more building work went in hospital and died six days before his 65 th birthday .

As for pensions , I have just received a letter from Scottish Widows to inform me my small private pension I got from work was £43.18 gross , it is now £21.59 net pension , so it work out at 50% income tax  and my only income is my state pension . having never been out of work since I left school and never claimed a penny in my life it wouldn't give me any encouragement to work any longer and just keep paying more and more tax .

Here yer go , this was sent 12 / 4 / 23

 

Have you framed this letter? Looks like its in a frame.

[marsh man]

33 minutes ago, billytheghillie said:

Have you framed this letter? Looks like its in a frame.

No , I have certainly not framed it , very nearly ended up in the bin but it got a reprieve as I need it to quote the numbers on it , might even get enough back to buy a box of cartridges , or more than likely they might say I owe them money 

[billytheghillie]

2 minutes ago, marsh man said:

No , I have certainly not framed it , very nearly ended up in the bin but it got a reprieve as I need it to quote the numbers on it , might even get enough back to buy a box of cartridges , or more than likely they might say I owe them money 

Good luck in getting some dosh back, but in my experience the tax man wont even give you a whiff of his ****.

[Minky]

I wasn't going to retire but it got a bit silly at work and the wife said " YOU ARE FINISHING " She was right and it did feel a bit odd at first but retirement is brilliant.  I don't even think about work now.   Loads of people have asked me if I want to work for them but apart from a few favour jobs it's done and I love it.  The wife is brilliant and we do as we please.  She isn't retired yet but she just said I'm  retired also.  Get up when I  want, do as I/we want it's  marvellous.   The thing that hacks me is that I worked hard and put money into my pension pot and took the 25% which I reinvested.  The downside is that I get wacked tax on the rest. You can take out the difference between the state pension and your allowances tax free up until the age of 75.  Now my oldest sister is in a care home after covid and has to pay £4500 a month for the privilege.  Her and her husband worked and payed all their working lives only to have it stripped away.  If they had blown it on ANYTHING they would have enjoyed it.  Retire and live when you have worked for and got before you are a mumbling old person looking at a wall awaiting the end of the conveyor belt to fall into a waiting box. You cant get a single second back.  And it doesn't matter what you get paid it isn't enough. Retire.

Edit....  I really did enjoy my job and would go back in a flash but NO.  Nothing is worth the time working at a job in comparison to being with the wife or helping the kids and being with the grand kids. The shooting time is good also.  Holidaying out on Maderia in 5 weeks. I wonder if there are any clay grounds out there.

Edited April 20, 2023 by Minky

[marsh man]

1 minute ago, billytheghillie said:

Good luck in getting some dosh back, but in my experience the tax man wont even give you a whiff of his ****.

When it came to income tax I have always let sleeping dogs lie , in my 30s I used to do a lot of small building jobs after tea and at weekends , we never earnt a fortune but it help to pay the mortgage , if I was building a garden wall then the householder would do the labouring to keep the cost down , fair enough , most of the work was in the village where I used to live and it didn't please one of the small builders as he sent the tax men a list of most of the work we done , the day arrived where a brown envelope came through my letter box from the inland revenue asking me to attend a meeting ? , the day arrived and when I got there I was asked to go to this particular room where Mr so and so would like to have a word with me , when I entered there were three or four blokes sat there , I sat down and the chap in charge said this is inspector what ever his name was and then the next until he had gone through whoever was there , he then got out this list of work and it went on and on and on , when he finished he said did you do all this work , No I didn't , I have got a full time job and a family to look after and I do need some sleep , well did you do any of it ? , there was the odd job where I helped the homeowner and he help me if I need something done , that is the way we work over our way , after many more questions I did admit I done some of it but not everything he came out with , I had to take up six of my previous wage slips , as luck would have it I was using my car to take the other blokes to a job we were doing in the country , my boss was giving me a hour a day overtime to cover my fuel and we were already doing 45 hours a week , with the extra hour I had pay silp's with 50 hours a week , so when I took them up I told the tax chap there were not enough hours in a day to do all that work and he ended up estimating the tax I owed to the work I agreed to which added up to just under £300 , they took some extra tax out each pay day until it was paid back , so that was one of the reasons I decided as soon as I reach retirement age then that will be my lot as far as paid income is concerned .

Then in my 50s I thought sod it , I have done my bit and I packed up work on my 60 th birthday , and if I had my time over again I might had called it a day in my 50s . time wait for no one   MM

[Minky]

Yep 100%

[billytheghillie]

Interesting read, I recently retired in December 2022, had to wait for 66th to get my pension. I thought about staying on and doing another year or two, but thought sod it, i have worked for 51 years solid since the age of 15. Best thing i have ever done, found my health has improved and the mrs has said my mannerism has changed dramatically. Like you i wish i had done it at 50, but my pension pot wasnt big enough. Funny enough i have just been offered about 3 month work, i said okay cash in hand, but he said no, it goes through the books. So sod that, the tax man has had enough off me, i can live without it, just more time for shooting and fishing 👍