UK pensions

[denby45]

8 minutes ago, Rajab Al Zarahni said:

Paying tax on private pensions is relevant because the tax code would be increased to reflect the additional income from the state pension.

Personal pensions are not used at all in the governments argument about contributing to the economy of the UK. The subject of the argument is State Pension freezing. Are the government forcing frozen Personal Pensions now? I missed that one.

I jest of course and I will repeat. The issue of personal pensions and the tax payable, if any is not relevant to our argument as they are not frozen.

 

The governments argument is not that we don't pay any personal income tax but about not contributing. They mean by that we do not spend our money in the UK but take our state pension abroad. In their eyes we are avoiding paying e.g. council tax, VAT and we are not consuming goods within the UK. Which means we are not contributing anything to the economy or paying tax on all consumer products we would normally buy if we lived there. Remember the manufacturers are paying tax on their profits when they sell you their goods. However we are not buying those goods with our state pension.

This is one of their arguments, it is not mine so let's not get into the "you are wrong" bit. I am merely setting out the facts and playing devils advocate. 

Our argument cannot include paying personal income tax on our pensions if the vast majority are not paying. That is why it is important to know how many of the frozen state pensions are liable for tax. I suspect there may not be very many, if there are any at all.

 

The other side of the coin is the fact that by leaving the UK we are no more a burden on the state for e.g. NHS facilities winter payment bus passes etc. etc. We are not using roads or any of the other facilities made available by the government. This is our main argument and far outweighs the non contribution argument the gov. are putting forward. IMHO of course. I don't have the actual figures of course.

 

Taking all that into account even if the gov. could prove the losses to the economy are more than the net gain through us leaving, the freezing of pensions would still be totally wrong and not the way to balance the shortfall. They may be able to balance for the first couple of years but the ravages of inflation further down the line makes a nonsense of their solution.

 

Sorry for putting you all to sleep.

 

Den     

 

 

 

 

[champers]

1 hour ago, Rajab Al Zarahni said:

What about those who made the maximum contribution to SERPS  and contributed for a lifetime of work up to retirement. They would certainly get a pension beyond the personal allowance of £11800 ?

The maximum state pension payable for a single man is £164.35 per week. That is less than £11800 p.a.

[Rajab Al Zarahni]

2 hours ago, champers said:

The maximum state pension payable for a single man is £164.35 per week. That is less than £11800 p.a.

That must be new state pension. The figure could be much higher under the old system which would include basic pension, SERPS,  SP2, and Graduated Pension. Furthermore, the figure will also be higher for those who have deferred and elected to take income rather than a lump sum.

Edited April 26, 2018 by Rajab Al Zarahni
Omission

[sandyf]

23 hours ago, Oxx said:

 

Why has it got anything to do with treaties at all? I've never understood the logic.

It was all to do with reciprocal arrangements on social security, there is a lot more in the agreement that state pension payments. Each agreement is different, Canada has a social security agreement but it excludes the increase to state pension. It would appear the government realised they were digging a hole for the future and just stopped making any further agreements.

It is my understanding that law to implement the exclusion of increases is embedded in a social security act and each time the act is reviewed that part is just ignored. From what I remember it seemed to be a trade off, if the pensions were ignored then other parts of the act would not become an issue.

It really is time that MP's did what they are paid to do rather than do what they are told.

[sandyf]

8 hours ago, champers said:

The maximum state pension payable for a single man is £164.35 per week. That is less than £11800 p.a.

That is not true, my state pension is a good bit higher than that and only just below the allowance because it is frozen.

Under the new arrangement, pension entitlement would be calculated on both the old and new arrangements and the higher figure applied. Anyone getting less than the published amount will also be receiving a return from the NI contributions that went to another scheme. 

Time will remove the effect of additional pension on the state pension as the government pushes people into their own arrangement to prop up their pension.

[sandyf]

9 hours ago, denby45 said:

Personal pensions are not used at all in the governments argument about contributing to the economy of the UK. The subject of the argument is State Pension freezing. Are the government forcing frozen Personal Pensions now? I missed that one.

I jest of course and I will repeat. The issue of personal pensions and the tax payable, if any is not relevant to our argument as they are not frozen.

 

The governments argument is not that we don't pay any personal income tax but about not contributing. They mean by that we do not spend our money in the UK but take our state pension abroad. In their eyes we are avoiding paying e.g. council tax, VAT and we are not consuming goods within the UK. Which means we are not contributing anything to the economy or paying tax on all consumer products we would normally buy if we lived there. Remember the manufacturers are paying tax on their profits when they sell you their goods. However we are not buying those goods with our state pension.

This is one of their arguments, it is not mine so let's not get into the "you are wrong" bit. I am merely setting out the facts and playing devils advocate. 

Our argument cannot include paying personal income tax on our pensions if the vast majority are not paying. That is why it is important to know how many of the frozen state pensions are liable for tax. I suspect there may not be very many, if there are any at all.

 

The other side of the coin is the fact that by leaving the UK we are no more a burden on the state for e.g. NHS facilities winter payment bus passes etc. etc. We are not using roads or any of the other facilities made available by the government. This is our main argument and far outweighs the non contribution argument the gov. are putting forward. IMHO of course. I don't have the actual figures of course.

 

Taking all that into account even if the gov. could prove the losses to the economy are more than the net gain through us leaving, the freezing of pensions would still be totally wrong and not the way to balance the shortfall. They may be able to balance for the first couple of years but the ravages of inflation further down the line makes a nonsense of their solution.

 

Sorry for putting you all to sleep.

 

Den     

 

The argument against the increases was never there when they were negotiating the agreements that are in place. It is merely a view that has been generated to try and drum up support for not changing the current situation.

As for income tax I think there are a lot more than you think. Nobody pays income tax on their state pension, the DWP do not collect tax. The amount is taken into consideration against other income, if there is no other income it is by direct payment. 

Last year 12% of my income tax went to funding the state pension, was I paying myself? As far as I am concerned that is about as close to legalised fraud as you can get.

[nong38]

Its been said before but lets not forget there are about 1 million expats in the EU, they chose to live over the channel, they pay their taxes just like us, they don't pay council tax just like us, they don't use the NHS just like us, but, they can use the local country service, free which we cannot and like us they make a marginal use of contributing to the UK economy as they spend mainly local like us. Some of them are seen walking along sunny, sandy beaches as well, just like us. The big difference though is that our pensions are frozen and the expats in the EU are not, they continue to get their annual increases.

Also worth remembering that the cost to unfreeze is estimated to be around 600 million, thats about 8 tomahawks, remember we last saw them in action just a couple of weeks ago, I think ours are called Brimstone and Storm Shadow, no problem finding the funds there then.

Regarding the taxing of pensions, your Sate Pension is received in full with no tax deductions, any taxes due after allowance calculations are taken from any other income you might receive such as private work pension.

[denby45]

1 hour ago, sandyf said:

The argument against the increases was never there when they were negotiating the agreements that are in place. It is merely a view that has been generated to try and drum up support for not changing the current situation.

As for income tax I think there are a lot more than you think. Nobody pays income tax on their state pension, the DWP do not collect tax. The amount is taken into consideration against other income, if there is no other income it is by direct payment. 

Last year 12% of my income tax went to funding the state pension, was I paying myself? As far as I am concerned that is about as close to legalised fraud as you can get.

Perfectly correct the argument has appeared recently to bolster the gov. side.

Sorry I am confused with your statement about " As for income tax I think there are a lot more than you think" Are you talking about State Pension? What I mean by that is are you suggesting there are a lot of pensioners with State Pension above the personal threshold. Or are you including other income. e.g. I have other income sourced in the UK and I have no problem paying taxes on that income. I also have a personal pension which when I claim it will be subject to tax deductions. Again I have no problem because for many years I got tax relief from the government against that pension. Of course I will be well over the threshold when that time comes. I have also taken a hit lately with the change to dividend payments. However again the funds are sourced in the UK so I cannot have objections.

I recognize that those taxes are probably correct but are in no way related to the state pension taxes.

 

It's like an old friend of mine who was peed off because he earned too much money in one tax year and was pushed into the higher tax bracket. Come on how does that make sense. 

 

Den

 

Edited April 27, 2018 by denby45

[denby45]

1 hour ago, nong38 said:

Its been said before but lets not forget there are about 1 million expats in the EU, they chose to live over the channel, they pay their taxes just like us, they don't pay council tax just like us, they don't use the NHS just like us, but, they can use the local country service, free which we cannot and like us they make a marginal use of contributing to the UK economy as they spend mainly local like us. Some of them are seen walking along sunny, sandy beaches as well, just like us. The big difference though is that our pensions are frozen and the expats in the EU are not, they continue to get their annual increases.

Also worth remembering that the cost to unfreeze is estimated to be around 600 million, thats about 8 tomahawks, remember we last saw them in action just a couple of weeks ago, I think ours are called Brimstone and Storm Shadow, no problem finding the funds there then.

Regarding the taxing of pensions, your Sate Pension is received in full with no tax deductions, any taxes due after allowance calculations are taken from any other income you might receive such as private work pension.

Apologize in advance for again playing devils advocate but I am afraid your argument cannot be used for the simple reason that there are many EUers living in the UK and contributing to the UK economy. Tit for tat basically.

 

Yes that is a good point about the war wastage and puts the figures squarely into perspective. Thanks for that. 

 

Den

[evadgib]

 

 

The International Consortium of British Pensioners (ICBP)

8 hrs · 

The Caribbean press picks up on Richard Branson's support of frozen pensioners
https://antiguaobserver.com/richard-branson-supports-the-f…/

ANTIGUAOBSERVER.COM

 

Richard Branson supports the fight against frozen pensions

About 4 percent of pensioners receiving a pension from the British Government have it frozen at the time of receipt and never receive an increase whereas, the other 96 percent of pensioners receive an increase every year. Most of these frozen pensioners live in the Commonwealth and many live in the

[steve187]

16 hours ago, denby45 said:

Paying tax on private pension is not relevant to the argument. Also I do know there is no facility for the government to tax your state pension at source. It is always paid gross and is supposed to be reconciled if you go over your personal allowance. I know many pensioners but I don't know any that get enough state pension to pay tax on it. The reason I asked about the numbers of pensioners is because I cannot find any figures online.

 

Den 

the sate pension is added to any other income and then taxed if over the £11,600 or so allowance, so some could be taxed on the state pension, which is part of their income. the tax man could take state pension out the tax calculations, as they do with private pensions for NI contributions, so to say state pension is not taxed is completely wrong. it would be just as easy to say you don't pay tax on private pensions, but as the government are so lazy to collect their own tax on the state pension they get others to collect their tax, as they do with VAT. all companies/ employers are unpaid tax collectors.

Edited April 27, 2018 by steve187

[sandyf]

4 hours ago, denby45 said:

Perfectly correct the argument has appeared recently to bolster the gov. side.

Sorry I am confused with your statement about " As for income tax I think there are a lot more than you think" Are you talking about State Pension? What I mean by that is are you suggesting there are a lot of pensioners with State Pension above the personal threshold. Or are you including other income. e.g. I have other income sourced in the UK and I have no problem paying taxes on that income. I also have a personal pension which when I claim it will be subject to tax deductions. Again I have no problem because for many years I got tax relief from the government against that pension. Of course I will be well over the threshold when that time comes. I have also taken a hit lately with the change to dividend payments. However again the funds are sourced in the UK so I cannot have objections.

I recognize that those taxes are probably correct but are in no way related to the state pension taxes.

 

It's like an old friend of mine who was peed off because he earned too much money in one tax year and was pushed into the higher tax bracket. Come on how does that make sense. 

 

Den

 

My comment was in response to your statement.

"Our argument cannot include paying personal income tax on our pensions if the vast majority are not paying. That is why it is important to know how many of the frozen state pensions are liable for tax. I suspect there may not be very many, if there are any at all."

I am suggesting that there are many on a frozen state pension that are liable for income tax.

You cannot identify a tax liability in respect of the state pension. Say for arguments sake you have a private pension of £10K per annum and a state pension of the same amount then there would be a tax liability on approx £8.5K of your income. The tax would be deducted from your private pension, but if you had no state pension there would be no liability, so the tax paid is not directly related to the private pension.

I have 2 small pensions and they spread across both, seems ludicrous to be paying tax on a pension of less the 2K per annum, but you cannot view them in isolation.

 

"how many of the frozen state pensions are liable for tax"  is a bit of a meaningless question, but I suspect what you really meant was  "how many of the frozen state pensions are above the tax threshold." but again means little in isolation.

 

[Rajab Al Zarahni]

19 hours ago, Rajab Al Zarahni said:

What about those who made the maximum contribution to SERPS  and contributed for a lifetime of work up to retirement. They would certainly get a pension beyond the personal allowance of £11800 ?

Just for information.

Having looked further into this it appears that potentially someone with a full basic pension who had contributed the maximum SERPS contributions would get a pension of  £15507.96/year ( £298.23 weekly). 

[steve187]

1 hour ago, Rajab Al Zarahni said:

Just for information.

Having looked further into this it appears that potentially someone with a full basic pension who had contributed the maximum SERPS contributions would get a pension of  £15507.96/year ( £298.23 weekly). 

could you link that info or give a breakdown of the amounts, and is that under the old system

[billd766]

2 hours ago, Rajab Al Zarahni said:

Just for information.

Having looked further into this it appears that potentially someone with a full basic pension who had contributed the maximum SERPS contributions would get a pension of  £15507.96/year ( £298.23 weekly). 

 

Even after 44 years of contributions that is about 3 times my annual state pension.

 

[Rajab Al Zarahni]

3 hours ago, steve187 said:

could you link that info or give a breakdown of the amounts, and is that under the old system

Yes it's under the old system and as at 2018 and comprises £125.95 Basic State Pension and £172.28 Additional pension( SERPS, SP2, Graduated Pension ).

 

 

[cheeryble]

On November 30, 2017 at 9:31 AM, bert bloggs said:

 

[mommysboy]

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

[Swimman]

7 minutes ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

 

Income is not taxed unless the threshold (currently £11,500) is reached. The SP is included in the calculation to determine if the threshold for paying tax has been reached.

[Rajab Al Zarahni]

3 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

If you regularly scan the media for interesting pension news items you will know that it has been suggested. The idea doesn't seem to have much popular support. The last time I read a news item about it the idea was to give everyone the currently frozen increases but take away the personal allowance. Another suggestion which is occasionally mentioned is to make OAP's pay NI contributions. Personally I don't see either idea becoming a party manifesto pledge as it would upset too many people.

[steve187]

6 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

i would think that is something that may happen in the future, was there not talk of it a few years back.

[billd766]

11 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

 

But as soon as they do that they are admitting the fact that we ARE taxpayers and therefore entitled to the personal tax allowance.

[evadgib]

12 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

How about Philippines etc?

This won't fly.

[denby45]

12 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

Yes it is realistic to assume that it can happen. There has been talk in the past that after up-rating the pensions for all expats this would be a way to compensate for expats not contributing to the UK economy. However they will have to include everyone who is ordinarily and non resident and that is a lot of voters. Actually if they did this would it not be better in some way? At least it would avoid the situation of older pensioners being the victims of inflation and having their income reduced every year forcing them into poverty. The rate of tax you pay could be set much like the tax on dividends which is 7.5%.

 

Den

Edited April 28, 2018 by denby45
Added extra comment

[sandyf]

13 hours ago, Rajab Al Zarahni said:

Yes it's under the old system and as at 2018 and comprises £125.95 Basic State Pension and £172.28 Additional pension( SERPS, SP2, Graduated Pension ).

 

 

Wow, That must have taken a bit of working out the max payable under the various components. Apart from the basic state pension I get 4 components.

 

Additional State Pension
Based on any earnings you may have made during the dates the scheme ran (6
April 1978 to 5 April 1997). This is xxxx but Contracted Out Deductions (COD)
of £0.00 have to be taken away as you have been in an employer's or a personal
pension scheme from 6 April 1978 to 5 April 1997.

 

Additional State Pension
Based on any earnings from 6 April 1997 to the date the scheme ended. which
are not subject to COD

 

Additional State Pension or State Second pension
Based on any earnings, caring or incapacity from 6 April 2OO2

 

Graduated Retirement Benefit
Based on contributions paid to the Graduated Retirement Benefit scheme, which
ran from 6 April 1961 to 5 April 1975, and any increases for putting off getting
your Graduated Retirement Benefit or delay in making a claim.

 

 

[sandyf]

13 hours ago, mommysboy said:

My fear is that a government will decide to tax the state pension for expats, arguing that as we are no longer resident for tax purposes we are not entitled to the personal tax allowance.

 

I don't know how realistic this fear is!  Can anyone comment?

Bit of a contradiction in terms.

Changing the personal allowance would increase liability whether you received state pension or not. To suggest taking away the allowance for some expats and not others is a bit far fetched.

Taking the allowance away from all expats would never have seen the light of day in the EU but with brexit, who knows. Not something for me to worry about, by the time it ever came about I will be pushing up daisies.

[mommysboy]

3 hours ago, billd766 said:

 

But as soon as they do that they are admitting the fact that we ARE taxpayers and therefore entitled to the personal tax allowance.

Thanks to all- it's just one of those fears, you know!

[midas]

3 hours ago, denby45 said:

Yes it is realistic to assume that it can happen. There has been talk in the past that after up-rating the pensions for all expats this would be a way to compensate for expats not contributing to the UK economy. However they will have to include everyone who is ordinarily and non resident and that is a lot of voters. Actually if they did this would it not be better in some way? At least it would avoid the situation of older pensioners being the victims of inflation and having their income reduced every year forcing them into poverty. The rate of tax you pay could be set much like the tax on dividends which is 7.5%.

 

Den

" his would be a way to compensate for expats not contributing to the UK economy "

 

What am I missing here? Didn't those expats contribute enough to the UK economy (tax payments) during the whole of their working lives?

[Swimman]

By paying tax I DO contribute to the economy because I take NOTHING out. No NHS or other 'benefits' for me. It is the likes of me that enable the Can't work, Won't work mob to pay for their booze, cigs, and Sky TV...............

[nong38]

4 hours ago, denby45 said:

Yes it is realistic to assume that it can happen. There has been talk in the past that after up-rating the pensions for all expats this would be a way to compensate for expats not contributing to the UK economy. However they will have to include everyone who is ordinarily and non resident and that is a lot of voters. Actually if they did this would it not be better in some way? At least it would avoid the situation of older pensioners being the victims of inflation and having their income reduced every year forcing them into poverty. The rate of tax you pay could be set much like the tax on dividends which is 7.5%.

 

Den

The first 2000 gbp dividends is currently tax free.