Tax Free Alowance

[SocketRocket]

I see that my State Pension has increased (good news) although the tax allowances have not (bad news) As the state pension is removed from your tax free allowance this means you pay more tax on some of your income above the state pension, effectively reducing the pension increase.

Hope this makes sense

 

[rulefan]

Wasn't it the same when you had a wage or salary?

Pensions are income and the tax is called Income Tax

 

[SocketRocket]

Wasn't it the same when you had a wage or salary?

Pensions are income and the tax is called Income Tax

No, the tax free allowance has tended to be raised by more than the pension increase.

 

[backwoodsman]

Not sure of the point?
If you're already paying income tax, then if you get more money, you pay more tax. ie you only get 80% (81% now?) of any increase. State pension is taxable. Just not done at source.

 

[jim8flog]

No, the tax free allowance has tended to be raised by more than the pension increase.

There has been no increase in the basic rate of personal allowance since 21/22 Tax year an even in that year it only went up £70