I am 70 next year and have noticed that despite no longer working I am still being taxed on my army pension and two small private pensions. Could anyone please advise if this is correct. The pension I draw down from the army is £484 per month and I also have old age state pension.
Regards
Harry
Yes you should be paying income tax, because pension is income. How much tax you should pay depends on how high all your income is, from all your four pensions put together, plus any other sources, such as interest from savings.
You will have a personal allowance of somewhere between £6610 (if your income is less than £18,300) and £4615 (if your income is more than £22,290), and you must pay tax in the normal way on everything above that allowance.
Also since you may have been born before 6th April 1935, then if you are married you may be entitled to Married Couple's Allowance.
DF
As others have said, you are still liable for income tax if your pensions and other sources of income (like interests) come to more than your allowance. You may find that it looks as though your army and other private pensions are taxed rather heavily. It's because your state pension is always paid gross, but it's still taxable. So your tax office deducts the total tax due from your other pensions. If you don't get a tax return, you can write to your tax office quoting your NI number and they will give you a computation of how your tax liability is worked out.
Alec
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.