Do you pay tax on the State Pension? Rules explained

Do you pay tax on the State Pension? Rules explained

Regular payments are made by the Government to people who claim their State Pension. However, how much someone gets in their State Pension payments will differ from person to person. State Pension amounts are determined based on a number of factors, such as someone’s National Insurance record.

How much is the new State Pension?

The full new State Pension is £179.60 per week for 2021.

However, someone may only get a percentage of this amount if they do not have a full National Insurance record.

To claim any of the new State Pension, claimants will usually need at least 10 qualifying years on their National Insurance record.

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Money from investments, property or savings may also count.

Certain benefits are also considered taxable, so should therefore be taken into account when working out total annual income.

The Government website adds: “You may have to pay Income Tax at a higher rate if you take a large amount from a private pension. You may also owe extra tax at the end of the tax year.”

If the total value of someone’s private pensions is more than £1,073,100, they may have to pay a tax charge.

Published at Mon, 21 Jun 2021 22:10:21 +0000