Latest news with #LizRitchie
Yahoo
3 days ago
- Business
- Yahoo
What pensioners need to know about income tax
Retirement is often seen as a time to relax and enjoy the rewards of a lifetime of hard work – but that doesn't mean that the dreaded taxes disappear. For pensioners, understanding how income tax applies in retirement is essential to managing finances and avoiding surprises. Whether you're drawing a state pension, private pension, or other forms of retirement income, knowing what's taxable can help you plan more confidently. We got in touch with some experts who have broken down some key things every pensioner needs to know about income tax, so it's one less thing to worry about in your golden years. What is income tax? 'Income tax is a tax paid on most types of income, from your salary at work, profits from a business to interest you make on investments,' explains Liz Ritchie, head of tax at Forvis Mazars. 'It applies to earnings from employment, self-employment, pensions, savings and investments. The amount you pay depends on how much you earn, with different income bands taxed at different rates.' Who has to pay income tax? 'Currently, anyone who has an income of more than £12,570 for the 2025/26 tax year will pay income tax on the amount they earn above the standard personal allowance,' says Amy Knight, personal finance and small business expert at NerdWallet UK. 'The rate at which you pay tax depends on how much you earn. 'The basic rate is 20%, charged on income up to £50,270 per year. Income tax is charged at 40% on earnings between £50,271 to £125,140 (known as the higher rate). If you earn more than £125,140, you'll pay the additional rate of income tax on those earnings, which is currently 45%.' If you run your own business or have a side hustle that makes less than £1,000, you do not need to report this or pay tax on that little bit of extra money you make. 'However, as soon as you cross the £1,000 mark, HMRC needs to know about this extra income, which will be factored into your tax calculations,' highlights Knight. 'You report self-employed income by filing a self-assessment tax return. The same applies if you start earning rental income from property you own.' What types of income are taxable for pensioners? Tax on income you receive from a pension is calculated in the same way as earnings from employment. 'Pensioners pay income tax once their income exceeds the £12,750 limit each year,' confirms Knight. 'This includes money from their state pension, any private and workplace pensions, rental income if they have a second property, and interest earned on savings and investments above the personal savings allowance. 'People who choose to run their own business after reaching state pension age will be taxed at the usual rates.' Some state benefits are also taxable, meaning pensioners may end up paying back some of the financial support they receive from the government, Knight adds. 'For example, bereavement allowance is taxable, so an older person who claims this benefit could see some or all of it wiped out if their income is above the tax-free allowance,' says Knight. What common tax reliefs or allowances do pensioners often overlook? 'Certain tax reliefs and allowances are often overlooked, such as the ability to take 25% of a private pension free of income tax [usually when you reach the age 55],' says Julia Rosenbloom, tax partner at law firm, Shakespeare Martineau. You can also still receive income tax relief on your pension contributions when you are retired up until age 75, says Ritchie. 'This is up to the amount you earn or the annual allowance of £60,000,' says Ritchie. 'If you are a higher or additional rate tax payer, you can also claim additional tax relief through self assessment and there are millions often left uncollected.' Plus, if you have unused pension annual allowance for the previous three tax years, this can be carried forward to allow for additional contributions and tax relief, adds Ritchie. 'However, if you have accessed your pension and started taking an income flexibly the rules can be different,' explains Ritchie. 'This usually triggers the Money Purchase Annual Allowance (MPAA) which sees the amount you can contribute to your pension and still receive income tax relief limited to £10,000.' Another allowance that is often overlooked is dividend allowance. '£500 of income from dividends can be taken income tax-free in 2024/25,' says Ritchie. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
What pensioners need to know about income tax
Retirement is often seen as a time to relax and enjoy the rewards of a lifetime of hard work – but that doesn't mean that the dreaded taxes disappear. For pensioners, understanding how income tax applies in retirement is essential to managing finances and avoiding surprises. Whether you're drawing a state pension, private pension, or other forms of retirement income, knowing what's taxable can help you plan more confidently. We got in touch with some experts who have broken down some key things every pensioner needs to know about income tax, so it's one less thing to worry about in your golden years. What is income tax? 'Income tax is a tax paid on most types of income, from your salary at work, profits from a business to interest you make on investments,' explains Liz Ritchie, head of tax at Forvis Mazars. 'It applies to earnings from employment, self-employment, pensions, savings and investments. The amount you pay depends on how much you earn, with different income bands taxed at different rates.' Who has to pay income tax? 'Currently, anyone who has an income of more than £12,570 for the 2025/26 tax year will pay income tax on the amount they earn above the standard personal allowance,' says Amy Knight, personal finance and small business expert at NerdWallet UK. 'The rate at which you pay tax depends on how much you earn. 'The basic rate is 20%, charged on income up to £50,270 per year. Income tax is charged at 40% on earnings between £50,271 to £125,140 (known as the higher rate). If you earn more than £125,140, you'll pay the additional rate of income tax on those earnings, which is currently 45%.' If you run your own business or have a side hustle that makes less than £1,000, you do not need to report this or pay tax on that little bit of extra money you make. 'However, as soon as you cross the £1,000 mark, HMRC needs to know about this extra income, which will be factored into your tax calculations,' highlights Knight. 'You report self-employed income by filing a self-assessment tax return. The same applies if you start earning rental income from property you own.' What types of income are taxable for pensioners? Tax on income you receive from a pension is calculated in the same way as earnings from employment. 'Pensioners pay income tax once their income exceeds the £12,750 limit each year,' confirms Knight. 'This includes money from their state pension, any private and workplace pensions, rental income if they have a second property, and interest earned on savings and investments above the personal savings allowance. 'People who choose to run their own business after reaching state pension age will be taxed at the usual rates.' Some state benefits are also taxable, meaning pensioners may end up paying back some of the financial support they receive from the government, Knight adds. 'For example, bereavement allowance is taxable, so an older person who claims this benefit could see some or all of it wiped out if their income is above the tax-free allowance,' says Knight. What common tax reliefs or allowances do pensioners often overlook? 'Certain tax reliefs and allowances are often overlooked, such as the ability to take 25% of a private pension free of income tax [usually when you reach the age 55],' says Julia Rosenbloom, tax partner at law firm, Shakespeare Martineau. You can also still receive income tax relief on your pension contributions when you are retired up until age 75, says Ritchie. 'This is up to the amount you earn or the annual allowance of £60,000,' says Ritchie. 'If you are a higher or additional rate tax payer, you can also claim additional tax relief through self assessment and there are millions often left uncollected.' Plus, if you have unused pension annual allowance for the previous three tax years, this can be carried forward to allow for additional contributions and tax relief, adds Ritchie. 'However, if you have accessed your pension and started taking an income flexibly the rules can be different,' explains Ritchie. 'This usually triggers the Money Purchase Annual Allowance (MPAA) which sees the amount you can contribute to your pension and still receive income tax relief limited to £10,000.' Another allowance that is often overlooked is dividend allowance. '£500 of income from dividends can be taken income tax-free in 2024/25,' says Ritchie. Sign in to access your portfolio
The Independent
4 days ago
- Business
- The Independent
What pensioners need to know about income tax
Retirement is often seen as a time to relax and enjoy the rewards of a lifetime of hard work – but that doesn't mean that the dreaded taxes disappear. For pensioners, understanding how income tax applies in retirement is essential to managing finances and avoiding surprises. Whether you're drawing a state pension, private pension, or other forms of retirement income, knowing what's taxable can help you plan more confidently. We got in touch with some experts who have broken down some key things every pensioner needs to know about income tax, so it's one less thing to worry about in your golden years. What is income tax? 'Income tax is a tax paid on most types of income, from your salary at work, profits from a business to interest you make on investments,' explains Liz Ritchie, head of tax at Forvis Mazars. 'It applies to earnings from employment, self-employment, pensions, savings and investments. The amount you pay depends on how much you earn, with different income bands taxed at different rates.' Who has to pay income tax? 'Currently, anyone who has an income of more than £12,570 for the 2025/26 tax year will pay income tax on the amount they earn above the standard personal allowance,' says Amy Knight, personal finance and small business expert at NerdWallet UK. 'The rate at which you pay tax depends on how much you earn. 'The basic rate is 20%, charged on income up to £50,270 per year. Income tax is charged at 40% on earnings between £50,271 to £125,140 (known as the higher rate). If you earn more than £125,140, you'll pay the additional rate of income tax on those earnings, which is currently 45%.' If you run your own business or have a side hustle that makes less than £1,000, you do not need to report this or pay tax on that little bit of extra money you make. 'However, as soon as you cross the £1,000 mark, HMRC needs to know about this extra income, which will be factored into your tax calculations,' highlights Knight. 'You report self-employed income by filing a self-assessment tax return. The same applies if you start earning rental income from property you own.' What types of income are taxable for pensioners? Tax on income you receive from a pension is calculated in the same way as earnings from employment. ' Pensioners pay income tax once their income exceeds the £12,750 limit each year,' confirms Knight. 'This includes money from their state pension, any private and workplace pensions, rental income if they have a second property, and interest earned on savings and investments above the personal savings allowance. ' People who choose to run their own business after reaching state pension age will be taxed at the usual rates.' Some state benefits are also taxable, meaning pensioners may end up paying back some of the financial support they receive from the government, Knight adds. 'For example, bereavement allowance is taxable, so an older person who claims this benefit could see some or all of it wiped out if their income is above the tax-free allowance,' says Knight. What common tax reliefs or allowances do pensioners often overlook? 'Certain tax reliefs and allowances are often overlooked, such as the ability to take 25% of a private pension free of income tax [usually when you reach the age 55],' says Julia Rosenbloom, tax partner at law firm, Shakespeare Martineau. You can also still receive income tax relief on your pension contributions when you are retired up until age 75, says Ritchie. 'This is up to the amount you earn or the annual allowance of £60,000,' says Ritchie. 'If you are a higher or additional rate tax payer, you can also claim additional tax relief through self assessment and there are millions often left uncollected.' Plus, if you have unused pension annual allowance for the previous three tax years, this can be carried forward to allow for additional contributions and tax relief, adds Ritchie. 'However, if you have accessed your pension and started taking an income flexibly the rules can be different,' explains Ritchie. 'This usually triggers the Money Purchase Annual Allowance (MPAA) which sees the amount you can contribute to your pension and still receive income tax relief limited to £10,000.' Another allowance that is often overlooked is dividend allowance. '£500 of income from dividends can be taken income tax-free in 2024/25,' says Ritchie.
Perth Now
28-05-2025
- Business
- Perth Now
Shock city Aussies are moving to
Victoria's Greater Geelong has become the nation's new top spot for regional migration, according to Commonwealth Bank's Regional Mover Index. Greater Geelong has toppled the Sunshine Coast's two-year winning streak with 9.3 per cent of total net internal migration in the March quarter 2025. The report, in partnership with the Regional Australian Institute, shows the trend of moving regionally that accelerated during the Covid pandemic is continuing, with 25 per cent more people moving from capital cities to the regions. The Sunshine Coast has been overtaken as Australia's top regional hub. NewsWire / Nicholas Eagar Credit: NewsWire RAI chief executive Liz Ritchie said Australians were leaving capital cities for the regions and not coming back. 'Regional Australia is being reimagined,' she said. 'The regions' enviable lifestyle offerings, buoyant jobs market, position as an economic leader and diverse communities are proving to be an ongoing lure, particularly for those in metropolitan areas. 'Contemporary regional Australia has what people are looking for and it's clear cliched images and misconceptions about regional living are well and truly a thing of the past.' Regional Australia's population now sits at 9.91 million, with the CBA indicating that number will continue to grow. CBA acting executive general manager Josh Foster said Geelong demonstrated Victoria's vitality. 'It's pleasing to see annual population growth is continuing to benefit Australia's regional economy as more people are drawn to the lifestyle and employment opportunities found beyond metropolitan areas,' he said. 'In a first for the RMI, Greater Geelong has become the star performer due to its idyllic location, established services and range of employment opportunities.' To support the demand for housing, the Victorian government has set a target of an additional 128,600 dwellings in Greater Geelong by 2051. The corpse flower in full bloom at the Geelong Botanic Gardens. NewsWire / Nadir Kinani Credit: News Corp Australia Sydney exodus continues Sydney continued to record the largest net outflows of all capital cities, driven by higher house prices in the Harbour City. The report said 40 per cent of those leaving Sydney were going to regional NSW, while 17 per cent were heading north to regional Queensland, a drop from 30 per cent this time last year. Despite the fall, the Sunshine Coast still ranks second overall, while the Gold Coast, Townsville and Fraser Coast are also picking up ex-Sydneysiders. 'Queensland's warmer climate and generally more affordable housing in regional locations ensures that it remains a magnet for movers from Sydney and Melbourne,' Mr Foster said. Movement was not restricted to the eastern seaboard, with Victor Harbor in South Australia recording strong interest from regional movers and Denmark and Harvey in Western Australia remaining popular with both regional and city movers alike. The index focuses specifically on movement to and from regional areas and excludes capital city moves.
News.com.au
28-05-2025
- Business
- News.com.au
'Economic leader': Aussies flock to new regional hotspot
Victoria's Greater Geelong has become the nation's new top spot for regional migration, according to Commonwealth Bank's Regional Mover Index. Greater Geelong has toppled the Sunshine Coast's two-year winning streak with 9.3 per cent of total net internal migration in the March quarter 2025. The report, in partnership with the Regional Australian Institute, shows the trend of moving regionally that accelerated during the Covid pandemic is continuing, with 25 per cent more people moving from capital cities to the regions. RAI chief executive Liz Ritchie said Australians were leaving capital cities for the regions and not coming back. 'Regional Australia is being reimagined,' she said. 'The regions' enviable lifestyle offerings, buoyant jobs market, position as an economic leader and diverse communities are proving to be an ongoing lure, particularly for those in metropolitan areas. 'Contemporary regional Australia has what people are looking for and it's clear cliched images and misconceptions about regional living are well and truly a thing of the past.' Regional Australia's population now sits at 9.91 million, with the CBA indicating that number will continue to grow. CBA acting executive general manager Josh Foster said Geelong demonstrated Victoria's vitality. 'It's pleasing to see annual population growth is continuing to benefit Australia's regional economy as more people are drawn to the lifestyle and employment opportunities found beyond metropolitan areas,' he said. 'In a first for the RMI, Greater Geelong has become the star performer due to its idyllic location, established services and range of employment opportunities.' To support the demand for housing, the Victorian government has set a target of an additional 128,600 dwellings in Greater Geelong by 2051. Sydney exodus continues Sydney continued to record the largest net outflows of all capital cities, driven by higher house prices in the Harbour City. The report said 40 per cent of those leaving Sydney were going to regional NSW, while 17 per cent were heading north to regional Queensland, a drop from 30 per cent this time last year. Despite the fall, the Sunshine Coast still ranks second overall, while the Gold Coast, Townsville and Fraser Coast are also picking up ex-Sydneysiders. 'Queensland's warmer climate and generally more affordable housing in regional locations ensures that it remains a magnet for movers from Sydney and Melbourne,' Mr Foster said. Movement was not restricted to the eastern seaboard, with Victor Harbor in South Australia recording strong interest from regional movers and Denmark and Harvey in Western Australia remaining popular with both regional and city movers alike. The index focuses specifically on movement to and from regional areas and excludes capital city moves.
