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For 35 years I worked and was deducted high national insurance contributions towards a SERPS pension - (known as State Second Pension). Now that I am retired, I am told that 7% of my State Pension is to be clawed back as tax! This comes as a shock as I had been surviving on very little money following injury for six years. I have very little in terms of savings and my State Pension is all I have. It does not stop there however...
I asked that it be deducted at source but the Tax Office cannot give a tax coding for State Pensions and require me (untill the day I die) to fill out their Self-Assessment as this is the only way they can collect the tax! Self-Assessment is practically a book by the way and it is also suggested that I need an accountant.
The tax is demanded as a lump sum at the end of the year. But, if you are on any benefit like council tax benefit, benefits get affected as authorities refuse to accept that my pension is taxable as it is not taxed at source and they don't see why they should muck around with tax formulas to work it out.
I am therefore being denied benefits I should be entitled to as the state pension shown is not the amount I am given to live on as 7% of it is taxed. In a court case I am involved in, I should be entitled to exemption of court fee because of my limited finances, but they will not take the tax into account.
Has anyone else experienced a problem such as this? Why did I pay a higher rate of national insurance contribution for all my working life to provide me with a pension when the government just takes 7% of that back in tax?
By: Doreen Jenkinson
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I think the only fair way to do it is make the state pension linked to your lifetime earnings on average, adjusted for inflation if they don't already. I don't know how it works.
My plan would be that its a % of your average weekly earnings so if you were on I don't know £500 per week as some people like HGV drivers bricklayers, (can make more than that I know) normally you'd get about 50% of that plus free national travel and free tv licence, like they do in Ireland, etc.
If you knew you had to earn a bigger pension you would try to get promotion at work or try to start your own business so there would be an incentive to working hard for your old age.
13/08/13 ahforfoulkessake
My plan would be that its a % of your average weekly earnings so if you were on I don't know £500 per week as some people like HGV drivers bricklayers, (can make more than that I know) normally you'd get about 50% of that plus free national travel and free tv licence, like they do in Ireland, etc.
If you knew you had to earn a bigger pension you would try to get promotion at work or try to start your own business so there would be an incentive to working hard for your old age.
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So Everybody, What do you think of the new state pension that's comming in 2017?
15/01/13 Anon
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Retiring at 65 - that's a dream. I was born on 01 September 1954. When I started work I thought I had a contract with the Government that I could retire at 60.
Well of course things change and I then discovered that I had to work until 65 in line with men. Now I have discovered I now have to work until I am 65 yrs 10 months and 5 days.
I have worked all my life and certainly paid well over the 30 years of NI contributions. I am absolutely sick of these changes and blame the benefit cheats who work the system, the so called asylum seekers and illegal immigrants who are milking this country and decent citizens like me and many others who have to support the good for nothing's. My philosophy is if you ain't paid anything in then you get nothing out. Wake up you so called do gooders of Britain and look after your own. I do manual work and will be lucky if I get to retirement age anyway.
05/02/12 Mrs Ann Oyed
Well of course things change and I then discovered that I had to work until 65 in line with men. Now I have discovered I now have to work until I am 65 yrs 10 months and 5 days.
I have worked all my life and certainly paid well over the 30 years of NI contributions. I am absolutely sick of these changes and blame the benefit cheats who work the system, the so called asylum seekers and illegal immigrants who are milking this country and decent citizens like me and many others who have to support the good for nothing's. My philosophy is if you ain't paid anything in then you get nothing out. Wake up you so called do gooders of Britain and look after your own. I do manual work and will be lucky if I get to retirement age anyway.
-4
To Anonymous. At my time of retirement at 65 years of age,I had worked and paid NI for 50 years, I also paid serps and graduated pension contributions. At that same time a worker had to have paid 49 years of NI, not 39 years. You say that you payed NI for 39 years and yet retired at 65. that puzzles me somewhat, 39 + either 15 years or 16 years (school leaving age) makes a total of either 54 or 55...??? yet you say you retired at 65. Did you not start work until you were 26 years of age. Just curious.
Regarding state pension and tax....my personal allowance for 2011-2012 exceeds my state pension by almost £1000, I therefore do not pay tax on my state pension.
04/08/11 Solvent
Regarding state pension and tax....my personal allowance for 2011-2012 exceeds my state pension by almost £1000, I therefore do not pay tax on my state pension.
4
I've paid NI contributions for 39 years and on reaching the age of 65, did not qualify for a full state pension. Recent changes mean that only 30 years NI contributions will be required for a full state pension. Now, where's the fairness in that?
15/06/11 Anonymous
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I have this very problem I am being threated with the Bailiffs as I have not paid any tax on my State Pension for 5 years and only just found out!. On research it appears that When I claimed Pension Credit the amount of state Pension should be net not gross, thereby allowing them to increase my Pension Credit by the amount of the IC, but, as you say, I do not know that amount until 12 months latter. Stupid really it is one gov dept to another, so why do I have to be threatened!!
21/03/11 snowed upnder
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I wonder if somebody from the united states can answer a query I have. In the UK our crisps come in about 25 different flavours. salt and vinegar, cheese and onion, chicken, beef, marmite to name but a few. A friend of mine say"s that in the US you only eat ready salted which I find astonishing, is that true?. I would also like to here from canadians and australians about there crisp eating habits. Thanks guys.
10/02/11 Crisps Lover
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Oh and I forgot we look down our silly noses of the French when they revolt well you see they have had a capitalisy inspired war on their soil and don't trust their politicians as no one should, it is only dimwits like the brits and the yanks do.
10/02/11 brim
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Look Britain is where the people are educated on the front page of the Sun and get their education certificates from mcdonalds, we have imported the free trade free raid capitalism from the the den of iniquity>america, where everything is for sale including your family! We have american banks who stole and theived from the british people billion upon billion of pounds to bankrupt the country, and they are now making more profit thn they were before the country was brought to knees by them, we also have pliticians who spend their days putting in place the policies that big american business wants which is totlally against the workers and we still listen to them after they themselves stole our money in their expenses claims by the billion, now the coalition are carrying on what thatcher did was to sell all of the assets that you and I bought with the aid of previous generations coal-gas-water etc>> remember thatcher, well you voted for her, even all the newspapers are owned by yanks and aussies, so no one is able to talk to each other without the spin. It's only capitalism which has no regard for people... wake up and think
10/02/11 Brim
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Woah... hold on there boys, you aint seen nothing yet. All those poor people who have paid their contributions for 20 years will be retiring later and later. In 30 years the poor peasantry will be forced to slog on until past 70, before enjoying maybe a few years of happy retirement before the health problems, resuting from of a long and stressful working life begin to impinge.
08/09/10 Biscuitbum
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it is grossly unfair to tax the state pension, when pension credit is not taxed. One pays tax on the contributions, therefore, one is being taxed twice. I pay 14% tax on my state pension and serps and a small civil service pension. I also have to pay council tax and am left with very little to live on. I feel very bitter about the whole thing because I have to pay for dental and optical treatment as well. It is much better to be on pension credit and get free council tax, rent or mortgage tax relief, free dental and optical treatment plus many other benefits A lot of people I know spent all there money on holidays and never paid tax anyway, because they always worked for money in their hand.
I therefore feel that the writer is justified in being bitter because it is not fair in the least. It is certainly not sensible to save, because when you reach pension age you have to watch the pennies because there are no freebies for you.
25/06/10 Alicia
I therefore feel that the writer is justified in being bitter because it is not fair in the least. It is certainly not sensible to save, because when you reach pension age you have to watch the pennies because there are no freebies for you.
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The tax system has to be complicated! the more complicated the government can make it, the more box ticking, telephone answering, wasterers the government can employ to run it.
25/12/09 Gainsborough lad.
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In order to assist the elderly with the high costs of council tax and fuel costs, the Government should increase the allowance before tax to £15000.
This would at one stroke; help to stop the thousands of old people dieing from hypothermia each year.
13/08/08 young man
This would at one stroke; help to stop the thousands of old people dieing from hypothermia each year.
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30.03.08 Why do people over 65 and born after 1935 have a low tax code ie 200- 300 yet
anyone under 65 or born before 1935 have a code of 500-600. I pay tax on everything over £40 odd pound a week yet if I was in the higher tax code bracket I could earn over £100 pound a week before tax. It seems so unfair when on a low income.
30/03/08 Kippermarc1
anyone under 65 or born before 1935 have a code of 500-600. I pay tax on everything over £40 odd pound a week yet if I was in the higher tax code bracket I could earn over £100 pound a week before tax. It seems so unfair when on a low income.
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miserablemoaninggit
The age of retirement is going up and up, the government is breaking pension pledges and the rich get richer and the poor poorer.
I think it is time to abandon the ballot box, accept that our democracy is broken and start making more direct protests in terms of marches, petitions, non-cooperation and other such non-violent means.
Otherwise, the ordinary folk are now doomed from the cradle to the grave