The state pension can be received once a person reaches state pension age. In order to get the payment, it must be claimed – otherwise the state pension is seen as being deferred.
The state pension itself is taxable, meaning that it counts in terms of Income Tax.
The standard Personal Allowance is £12,500, and this means that taxable income of up to this amount does not need to be paid tax on.
However, it may be that a person has a different Personal Allowance.
For example, this can change if a person opts to claim Marriage Allowance, or if they get Blind Person’s Allowance.
Alternatively, the Personal Allowance may be smaller or reduced to zero for people who have income of more than £100,000.
Some people who have reached state pension age may be able to claim another payment – an income-related benefit.
This is known as Pension Credit, and it is made up of two parts: Guarantee Credit and Savings Credit.
A person needs to have reached Pension Credit qualifying age in order to claim it.
Guarantee Credit tops up the weekly amount if it below £173.75 for single people or £265.20 for couples.
It may be that a person can get this even if they have savings, a pension, or their own home.
Savings Credit is an additional payment for people who saved some money towards their retirement, such as a pension for example.
It may be that a person is not eligible for Savings Credit if they reached state pension age on or after April 6, 2016.
The Higher rate applies to taxable income ranging between £50,001 to £150,000.
The tax rate for this band is 40 percent.
The final tax band is the Additional rate, and this applies to taxable income of more than £150,000.
For this tax band, the tax rate is 40 percent.
Published at Fri, 05 Jun 2020 09:34:00 +0000