State Pension

[marsh man]

2 hours ago, oowee said:

Yes. 

Cheers , would my allowance now be more or less ?   

[Cosmicblue]

State pension is funded by our historical NI (National Insurance) contributions, not income tax.  In a fifty year working life I have tipped plenty into the pot and now at retirement age it is time to take it back.

I was about 30 years of age (66 now), working in a garage when I finally twigged (slow learner😀) that there is no correlation between how hard you work and how much you get paid  - there ought to be in a fair world but as most of us have worked out - life isn't fair. Back then in the garage there wasn't even an occupational pension to be had.

 

[Lloyd90]

12 minutes ago, Cosmicblue said:

State pension is funded by our historical NI (National Insurance) contributions

 

I believe that is incorrect.
 

Your historic NI contributions funded people on pensions at that time. 

 

The current pension payments are funded by current NI payments, not historic ones. There is no fund or investment that was paid into. 

[JohnfromUK]

6 minutes ago, Lloyd90 said:

There is no fund or investment that was paid into. 

That is correct (although some countries e.g Norway, do have a fund).

I think all tax, VAT, duties and NI etc. go into a big 'pot' (called The Treasury).  From that all spending goes out  including pensions, NHS, Defence, Transport etc.  Only rarely are things  'ring fenced' for a particular purpose.

The reasons income tax and NI are 'separate' is because they are levied somewhat differently.  Put simply

• NI is payable on doing work (employed and self employed) and was 'capped' such that apart from low earners, most middle and top earners paid the same.  (It is also paid by employers).
• Income tax is on all income (above an allowance) whether from work, savings, interest, dividends, pensions and is taxed on a low/medium/high basis depending on earnings.

[Penelope]

1 hour ago, marsh man said:

Cheers , would my allowance now be more or less ?   

Less.

[TOPGUN749]

16 hours ago, steve_b_wales said:

My new rate from April is £884:80. I've paid in the full amount of contributions since 1976.

Mine is too! It seems some people get extra due to SERPS possibly.

[marsh man]

2 hours ago, Penelope said:

Less.

I can see me having very little left Paul, if any from my so called private pension , next in line will be what little we get for picking up and that will be attacked from all sides and top and bottom , once they find out we get £45 for roughly a eight hour day and use our own transport plus feeding the dog they might give us a little back  

[Lloyd90]

If your state pension is around £12,000, and your tax free allowance is around the same, then the state pension will take up that amount. 
 

After getting state pension you no longer pay the 12% (now 10%) national insurance charge. 
 

Any tax on private pension should then only be taxed at 20% up to the 40% tax threshold, just over £50,000.

 

I am struggling to see how people “lose half” of their private pensions to tax, unless their private pensions are enormous? 

[amateur]

34 minutes ago, marsh man said:

I can see me having very little left Paul, if any from my so called private pension , next in line will be what little we get for picking up and that will be attacked from all sides and top and bottom , once they find out we get £45 for roughly a eight hour day and use our own transport plus feeding the dog they might give us a little back  

I trust that you are claiming those expenses against the income!

One nice little wheeze that I used to apply, when I was involved in motorcycle sport a long time ago, was to take a supply of odd spares with me, plugs, gasket cement, control cables and the like and sell them to blokes who were in need of them. As this constituted a "business", for tax purposes I was able to offset all my expenses against the meagre sales, and inevitably show a tax loss which then was offset against the tax on my employment that I paid via PAYE. So the taxman paid me back something every year.

[Vince Green]

3 hours ago, Lloyd90 said:

I believe that is incorrect.
 

Your historic NI contributions funded people on pensions at that time. 

 

The current pension payments are funded by current NI payments, not historic ones. There is no fund or investment that was paid into. 

This is correct, its a ponsi scheme. When it was introduced in 1909 (originally as the old age pension) it was only a very small number of people that lived long enough to collect it. Those that did only lived about an average of a year before they too died.

Today its all got a bit out of control

Edited February 23, 2024 by Vince Green

[oowee]

23 minutes ago, Vince Green said:

This is correct, its a ponsi scheme. When it was introduced in 1909 (originally as the old age pension) it was only a very small number of people that lived long enough to collect it. Those that did only lived about an average of a year before they too died.

Today its all got a bit out of control

It's been ruined by people living too long. 

[Vince Green]

Just now, oowee said:

It's been ruined by people living too long. 

I know, inconsiderate bloody people. And the NHS suffers from the same problem

[oowee]

7 minutes ago, Vince Green said:

I know, inconsiderate bloody people. And the NHS suffers from the same problem

😁

[marsh man]

53 minutes ago, amateur said:

I trust that you are claiming those expenses against the income!

One nice little wheeze that I used to apply, when I was involved in motorcycle sport a long time ago, was to take a supply of odd spares with me, plugs, gasket cement, control cables and the like and sell them to blokes who were in need of them. As this constituted a "business", for tax purposes I was able to offset all my expenses against the meagre sales, and inevitably show a tax loss which then was offset against the tax on my employment that I paid via PAYE. So the taxman paid me back something every year.

A lot of the local shoots now pay the tax before the shoot helpers are given there ( wages ) we have to sign for ours and I think the cost to involve an accountant would cost more than what we would save , think it's a case of let sleeping dogs lie 

[12gauge82]

4 hours ago, Lloyd90 said:

I believe that is incorrect.
 

Your historic NI contributions funded people on pensions at that time. 

 

The current pension payments are funded by current NI payments, not historic ones. There is no fund or investment that was paid into. 

You are of course correct, but I think the moral point of his argument is valid. He's paid in to the system all his life and now it's right that the system looks after him.

Edited February 23, 2024 by 12gauge82

[amateur]

1 hour ago, marsh man said:

A lot of the local shoots now pay the tax before the shoot helpers are given there ( wages ) we have to sign for ours and I think the cost to involve an accountant would cost more than what we would save , think it's a case of let sleeping dogs lie 

I wasn't a qualified accountant when I started offsetting expenses against casual income, just an articled clerk.

You don't need an accountant to sort out basic tax claims.

As the advert goes 'Every little helps'

[Lloyd90]

2 hours ago, marsh man said:

A lot of the local shoots now pay the tax before the shoot helpers are given there ( wages ) we have to sign for ours and I think the cost to involve an accountant would cost more than what we would save , think it's a case of let sleeping dogs lie 

Dangeorus game for them to be playing, “paying the tax”, considering most beaters / pickers up are out from around 8/9am - 2-3pm easily, and get “paid” about £30-40. 
 

Could be accused of slave labour 🤣

[ditchman]

4 minutes ago, Lloyd90 said:

Dangeorus game for them to be playing, “paying the tax”, considering most beaters / pickers up are out from around 8/9am - 2-3pm easily, and get “paid” about £30-40. 
 

Could be accused of slave labour 🤣

and picker uppers have to foot the vets bills themselves........

i was getting £40 quid forrunning my dogs ......15 years ago

[marsh man]

11 minutes ago, ditchman said:

and picker uppers have to foot the vets bills themselves........

i was getting £40 quid forrunning my dogs ......15 years ago

It haven't gone up much in 15 years as this year we got £45 , about the price of one bird shot 

 

18 minutes ago, Lloyd90 said:

Dangeorus game for them to be playing, “paying the tax”, considering most beaters / pickers up are out from around 8/9am - 2-3pm easily, and get “paid” about £30-40. 
 

Could be accused of slave labour 🤣

One shoot I know of were paying the beaters two seasons ago £45 and they were expected to pay the income tax , last year on the first shoot one of the beaters complained he was £5 short in his wage packet , the shoot owner said the wagers were right as last season he was paying the tax and he was paying £9.00 on top of the £40 he was giving the beaters , strange ole game this beating ( brushing ) lark 

[shaun4860]

Guys guys

This is a thread about the state pension.

NOT about how much beaters get or tax they pay.

If you wish to discuss that then please go to the correct section.

This has been a good thread so far let’s not have it locked due to derailment.

Cheers

[steve_b_wales]

Update:

I've just been sent my 2024/25 tax code.

It starts off at £12570, then I get flat rate job expenses (£100) plus professional subscriptions (Unison)£52:00 which equals

£12,722

Less State Pension (£11,485)

Total tax free amount = £1237  ( tax code C123L)

So, as mentioned previously, my state pension is wiped out, all because I chose to continue working!

Oh, I forgot, I don't pay National Insurance anymore. Yahoo!!!!

Edited March 1, 2024 by steve_b_wales

[London Best]

I don’t know why you feel hard done to. It is the same for everybody. What matters is that you are no worse off than anyone else. In fact, now you are drawing state pension you are £1237 better off.

[TOPGUN749]

5 minutes ago, steve_b_wales said:

Update:

I've just been sent my 2024/25 tax code.

It starts off at £12570, then I get flat rate job expenses (£100) plus professional subscriptions (Unison)£52:00 which equals

£12,722

Less State Pension (£11,485)

Total tax free amount = £1237  ( tax code C123L)

So, as mentioned previously, my state pension is wiped out, all because I chose to continue working!

Oh, I forgot, I don't pay National Insurance anymore. Yahoo!!!!

So you can earn £1237 tax free then everything is taxed at 20%. If you earn £25,000 from your job you will pay £4,752 tax,leaving you with a total of £31,733 to live on.

You could have deferred your state pension of course, but they only allow you 5.8% extra for every year deferred so you may never get the full amount lost back again.

I gave up my work at 63, lived on savings until 66, now getting about £12,500 a year pensions and no tax.

[TOPGUN749]

40 minutes ago, London Best said:

I don’t know why you feel hard done to. It is the same for everybody. What matters is that you are no worse off than anyone else. In fact, now you are drawing state pension you are £1237 better off.

Over £9,000 better off, about £2500 of the pension goes to tax.

[steve_b_wales]

2 hours ago, London Best said:

I don’t know why you feel hard done to. It is the same for everybody. What matters is that you are no worse off than anyone else. In fact, now you are drawing state pension you are £1237 better off.

It's not a case of 'I'm hard done by' more that our government claw back money that, should not be classed as income. I could retire and live off my savings/pension, but I decided to give it a least one more year before I finally finish work. Maybe I'll go part-time later on. My annoyance is that the government, instead of allowing people like myself, to continue working and receive state pension, they class the pension as income and tax it. And, I am not better off at all, because if my tax code had remained the same, then I would be paying less tax on my wages.