"Anyone solely receiving the new flat-rate state pension - for those who reached state pension age after April 2016 - will get 12,547.60 next year. That is just below the income tax threshold of 12,570."
"That threshold is frozen and highly likely to be breached by the state pension from April 2027, meaning the portion of pension income over this threshold would be taxed."
"Small tax sums would normally be collected by the Simple Assessment process where HM Revenue and Customs does all the calculations and sends the pensioner a tax demand at the end of the year."
"She later told Martin Lewis, founder of Money Saving Expert, that "in this Parliament, they won't have to pay the tax"."
People whose only income is the state pension will be exempt from income tax until at least 2030. The new flat-rate state pension for those reaching state pension age after April 2016 will be £12,547.60 next year, just below the current income tax personal allowance of £12,570. The frozen personal allowance is expected to be exceeded by pension increases from April 2027, which would normally make the excess taxable. Small tax amounts are usually collected through HMRC's Simple Assessment process. Around three-quarters of pensioners already pay income tax because they have additional pension income, including about 2.5 million on pre-2016 pension arrangements. The exemption creates potential winners and losers and could increase administrative complexity.
Read at www.bbc.com
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