A question about : Deferred Pension Robbery
I'm looking for confirmation that I am being robbed by the revenue!
I am 70 years old, I have paid my dues for fifty five years, five years ago I elected to defer my pension for five years, this year I decided to claim a lump sum and start to take my state pension, I am still working.
The revenue (because I am still working)are not only taking 40% of the accrued lump sum payment, but have now reduced my personal allowance from 944L (Ј9440) to 208L (Ј2008) a reduction of Ј7432 of which I will be taxed at 40% Ј2972.80!
My pension amounts to Ј7405.69 per year of which I will pay an extra tax of Ј2972.80 leaving Ј4432.89 amounting to Ј84.70 a week, which will also be taxed at 40% Ј33.88 leaving Ј50.82!!
Can anybody confirm that this is correct, factually, ethically or morally?? Thank you Plunders
Best answers:
- From https://www.gov.uk/deferring-state-p...at-you-may-get
Your extra State Pension counts as income and you have to pay tax on it. Your lump sum is taxed at the highest tax rate that applies to your other income. - State pension is taxable income.
Because the state pension is paid gross, any tax due is either paid through your private pension provider/employer or through self assessment.
If your state pension plus your other income takes you into the 40%
band, then you pay tax on the relevant portion of income at 40%.
You could have continued to defer if your tax rate would have been lower when you stopped working?
The information on tax and deferred pensions was quite clear in the guidance given before you deferred - did you read it?
I don't understand your gripe?
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