Latest news with #NewStatePension
Daily Record
22-07-2025
- Business
- Daily Record
New call to increase Personal Allowance to £25,000 for all pensioners
The Personal Allowance is set to remain frozen at £12,570 until April 2028. Income tax rises for Scots in April - how the changes affect you A new online petition is calling on the UK Government to increase the personal tax allowance from £12,570 to 'at least £25,000' to help support pensioners in retirement. The Labour Government announced earlier this year that the Personal Allowance will remain frozen at £12,570 until April 2028. Petition creator Rosemary Grey argues that raising the income threshold would 'support our older citizens, many of whom have already contributed by paying tax during their working life'. The e-petition has been posted on the UK Government's Petitions Parliament website. At 10,000 signatures of support it would be entitled to a written response from the UK Government, at 100,000, it would be considered by the Petitions Committee for debate in Parliament. The latest figures from the Department for Work and Pensions (DWP) show there are now 13 million people of State Pension age across the country. The current official age of retirement is 66 and set to rise to 67 between 2027 and 2028. HM Revenue and Customs (HMRC) data indicates that 8.7m pensioners are projected to pay income tax on their retirement income in 2025/26. It marks an increase of around 420,000 compared to the previous year (2024/25) and a rise of 1.85m from 10 years ago (2015/16). The full annual New State Pension reached £11,973 in 2025/26, tipping hundreds of thousands more pensioners into paying income tax. The UK Government has also confirmed it will honour the Triple Lock policy during this parliamentary term. However, this could see everyone on the full, New State Pension pushed over the tax threshold in just two years' time. David Brooks, head of policy at leading independent consultancy Broadstone, said: 'We would expect a growing number of pensioners to be liable for income tax as the country's demographic changes due to our ageing population. 'Fiscal drag, however, is also bringing hundreds of thousands more pensioners into paying Income Tax bracket every year as the frozen Personal Allowance thresholds combines with the Triple Lock-protected State Pension. 'While perhaps personally frustrating for many pensioners, it reflects the nature of inflation linked occupational pensions and a Triple-locked State Pension that continues to rise.' He added: 'The government will be called on again to protect pensioners from this impact but with seemingly few ways to control the rise in pensioner incomes, taxation is the only tool left. 'We should also expect the income tax from pensioners to rise in coming years as more income will be taken from pensions. Taking pension income is the key way to protect pension benefits from the impact of the Inheritance Tax Rules on unspent pension funds due to come in from April 2027.' Under the Triple Lock policy, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent. It is aimed at preventing the value of the State Pensions being whittled away by cost of living pressures. The New and Basic State Pensions increased by 4.1 per cent in April, however, future forecasts from the Labour Government expect it to rise by 2.5 per cent over the next four financial years. Using these calculations, it puts the full New State Pension on track to be worth £12,578.80 in the 2027/28 financial year - £78.80 over the Personal Allowance. While the amount of State Pension to be taxed may seem relatively small - tax is only paid on the amount over the Personal Allowance - older people with other income streams could find themselves having to part with more cash to pay a tax bill - if it's not automatically deducted from private or workplace pensions through PAYE. Online guidance at on who might need to pay tax on their pension also includes a handy tool to calculate how much tax someone might need to pay, and the different ways this can be done. The latest State Pension Triple Lock predictions show the following projected annual increases: 2025/26 - 4.1%, the forecast was 4% 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5% State Pension payments 2025/26 Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 Future new State Pension forecasts Under a 2.5 per cent increase, the full New State Pension will be worth: 2026/27 - £236 per week, £12,227.30 a year 2027/28 - £241.90 per week, £12,578.80 a year What is taxed Guidance on states: 'You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates. Your total income could include: the State Pension you get - Basic or New State Pension Additional State Pension a private pension (workplace or personal) - you can take some of this tax-free earnings from employment or self-employment any taxable benefits you get any other income, such as money from investments, property or savings Check if you have to pay tax on your pension Before you can check, you will need to know: if you have a State Pension or a private pension how much State Pension and private pension income you will get this tax year (April 6 to April 5) the amount of any other taxable income you'll get this tax year (for example, from employment or state benefits) You cannot use this tool if you get: any foreign income Marriage Allowance Blind Person's Allowance Use this online tool at to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on here.
Daily Record
14-07-2025
- Business
- Daily Record
Retirement expert warns number of pensioners paying tax set to soar due to rising incomes
HMRC estimates nearly 9 million pensioners will pay tax for the current financial year. Income tax rises for Scots in April - how the changes affect you The latest HM Revenue and Customs (HMRC) data indicates that 8.7m pensioners are projected to pay income tax on their retirement income in 2025/26. It marks an increase of around 420,000 compared to the previous year (2024/25) and a rise of 1.85m from 10 years ago (2015/16). However, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns more pensioners will be 'dragged into taxpaying territory' over the coming years due to frozen income thresholds. The Personal Allowance threshold will be frozen at £12,570 until April 2028, but the New State Pension is on track to exceed that income limit by April 2027. The full, New State Pension is worth £11,973 during the current financial year. Ms Morrissey explained: 'The pension tax paying population is surging. On the one hand, this can be celebrated as a sign of rising incomes among this population, but it's also fair to say that frozen tax thresholds have also played a huge part in dragging more pensioners into taxpaying territory. With the freeze set to stay in place until 2028, we expect to see these numbers continue to swell. 'There are things that can be done to help manage these tax liabilities. For a start, up to 25 per cent of your pension can be taken tax free and this can be used alongside taxable income to keep you below an income tax threshold. Retirement income is also more than just about pensions, with ISAs also able to play a key role.' It's important to be aware that the income from ISAs is tax free which means it can be used alongside your pension income to keep the tax bill down. Ms Morrissey also highlighted how pensions can also play an important role in helping working-age people manage their taxes. She explained: 'Paying into a pension reduces your adjusted income and this can reduce the amount of tax you have to pay or even stop you from breaching a threshold that moves you into paying tax at a higher rate. 'This can be especially helpful to those who earn between £100,000 and £125,140 per year who get hit by the stealthy 60 per cent tax trap that erodes your personal allowance.' Under the Triple Lock policy, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent. It is aimed at preventing the value of the State Pensions being whittled away by cost of living pressures. The New and Basic State Pensions increased by 4.1 per cent in April, however, future forecasts from the Labour Government expect it to rise by 2.5 per cent over the next four financial years. Using these calculations, it puts the full New State Pension on track to be worth £12,578.80 in the 2027/28 financial year - £78.80 over the Personal Allowance. While the amount of State Pension to be taxed may seem relatively small - tax is only paid on the amount over the Personal Allowance - older people with other income streams could find themselves having to part with more cash to pay a tax bill - if it's not automatically deducted from private or workplace pensions through PAYE. Online guidance at on who might need to pay tax on their pension also includes a handy tool to calculate how much tax someone might need to pay, and the different ways this can be done. The latest State Pension Triple Lock predictions show the following projected annual increases: 2025/26 - 4.1%, the forecast was 4% 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5% State Pension payments 2025/26 Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 Future new State Pension forecasts Under a 2.5 per cent increase, the full New State Pension will be worth: 2026/27 - £236 per week, £12,227.30 a year 2027/28 - £241.90 per week, £12,578.80 a year What is taxed Guidance on states: 'You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates. Your total income could include: the State Pension you get - Basic or New State Pension Additional State Pension a private pension (workplace or personal) - you can take some of this tax-free earnings from employment or self-employment any taxable benefits you get any other income, such as money from investments, property or savings Check if you have to pay tax on your pension Before you can check, you will need to know: if you have a State Pension or a private pension how much State Pension and private pension income you will get this tax year (April 6 to April 5) the amount of any other taxable income you'll get this tax year (for example, from employment or state benefits) You cannot use this tool if you get: any foreign income Marriage Allowance Blind Person's Allowance Use this online tool at to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on here.
Daily Record
11-07-2025
- Business
- Daily Record
People set to retire this year could boost annual State Pension payments by up to £694
The New State Pension is worth up to £11,973 over the current financial year. Pension Credit – Could you or someone you know be eligible? A survey of 1,050 retired and semi-retired people by later-life specialist Just Group has found that a quarter (25%) of those aged 55-64 are unaware of the option to defer their State Pension. The official age of retirement is 66 for men and women, but is set to rise to 67 between 2026 and 2028 under current UK Government plans. Those who are eligible for the New State Pension (post April 2016) can benefit from a one per cent increase in their weekly State Pension for every nine weeks they delay claiming the payment, equivalent to nearly 5.8 per cent extra income for every full year deferred. The New State Pension is worth £230.25 each week over the 2025/26 financial year. People due to retire, who choose to defer claiming the State Pension, will benefit from an extra £13.35 every week - equivalent to a boost of £694.20 over the next 12 months. Those who reached retirement age before April 6, 2016, but chose to defer claiming the Basic State Pension, are treated more generously, according to Just Group. These retirees receive an extra one per cent State Pension income for every five weeks deferred, equal to an annual rise of 10.4 per cent or £954.20, which can be taken either as extra income or a lump sum. Example You get £176.45 a week (the full Basic State Pension) By deferring for 52 weeks, you'll get an extra £18.35 a week (10.4% of £176.45). The Just Group research indicated that women (26%) were significantly more likely than men (19%) not to know about the possibility of deferring the State Pension, while 26 per cent of those aged 75 and over also did not know deferral was an option. Commenting on the findings, Stephen Lowe, group communications director at Just Group, said: 'Deferring can be a good option for people who don't need the income immediately - perhaps because they are still working or have other sources of cash - so it is disappointing a quarter of those approaching State Pension age don't know about the option.' However, he added: 'While deferring might not be the right option for everyone, it should still be something everyone knows about given that the State Pension is widely considered a 'bread and butter' source of income in retirement, with 3.4 million retired households relying on it for more than half of their yearly income. 'Deferring has become less attractive in recent years because the terms have become less generous for those who reached State Pension age on or after 6 April 2016 and there is no option to take the deferred income as a lump sum. However, even for those who reached State Pension age after that date, in some circumstances it can still make sense to forgo some income in the short-term for a higher income in later life that is currently guaranteed to keep up with inflation.' The retirement specialist said that the State Pension provides an important bedrock of income for many pensioners so it's crucial people have a full understanding of all the options that are available to them. State Pension payments 2025/26 Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 Future State Pension increases The Labour Government has pledged to honour the Triple Lock or the next five years and the latest predictions show the following projected annual increases: 2025/26 - 4.1% (the forecast was 4%) 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5% State Pension and tax The Personal Allowance will remain frozen at £12,570 over the 2025/26 financial year. The most important thing to remember is that someone only on the full New State Pension will not pay income tax for the next two years, but older people with additional income through employment, private or workplace pensions, might need to pay tax. The amount of tax paid is only on the amount over the personal allowance, and not the entire amount. Anyone with additional income on top of their State Pension may need to pay tax. This is paid a year in arrears, so if the 2025/26 financial year's uplift takes you over the threshold, you will not receive a tax bill from HM Revenue and Customs (HMRC) until July 2026.
Daily Mirror
11-07-2025
- Business
- Daily Mirror
Pensioners await July 17 hint that may point to future payments
The most recent data from the Office for National Statistics (ONS) indicates that UK inflation fell to 3.4 per cent in May, a slight decrease from 3.5 per cent in April Nearly 13 million State Pensioners across Great Britain should keep an eye on the Consumer Price Index (CPI) inflation rate this month. That's because it plays a pivotal role in the Triple Lock measure that determines the annual increase state pensioners get in payments. The latest data from the Office for National Statistics (ONS) shows that UK inflation dropped to 3.4 per cent in May, a slight dip from 3.5 per cent in April. The yearly growth in employees' average wages for regular earnings (excluding bonuses) was recorded at 5.6 per cent and total earnings (including bonuses) stood at 5.5 per cent. Under the Triple Lock measure, State Pensions rise each year in line with whichever is the highest of average annual earnings growth from May to July, CPI in the year to September or 2.5 per cent. So at the moment, the earnings figure is the one that will decide payments - but of course things could change. In April, the New and Basic State Pension saw an increase of 4.7 per cent, meaning someone on the full New State Pension currently receives £230.25 per week, or £921 every four-week pay period. Those on the full Basic State Pension receive £176.45 each week, or £705.80 every four-week pay period, reports the Daily Record. State Pension uprating predictions for 2026/27 Looking ahead to the State Pension uprating predictions for 2026/27, the Triple Lock is currently set to be determined by the earnings growth element, which presently stands at 5.5 per cent. However, this figure may fluctuate and isn't the final metric that will determine the level of uprating. The next CPI figure will be released by the ONS on July 17. A potential 5.5 per cent increase on the current State Pension could result in the following payouts: Full New State Pension Weekly: £242.90 Four-weekly pay period: £971.60 Annual amount: £12,630.80 Full Basic State Pension Weekly: £186.25 Four-weekly pay period: £744.60 Annual amount: £9,679.80 The official annual uprating won't be confirmed until the Autumn Budget, but pensioners - and those due to retire next year - can start to plan their finances by following the Triple Lock measurements. The September CPI figure will be published in mid-October, while the wages growth figure is usually released in August. What is taxed Guidance on states: 'You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates. Your total income could include: the State Pension you get - Basic or New State Pension Additional State Pension a private pension (workplace or personal) - you can take some of this tax-free earnings from employment or self-employment any taxable benefits you get any other income, such as money from investments, property or savings READ MORE: 'When doctors finally told me what my rash was, I considered dying' Check if you have to pay tax on your pension Before you can check, you will need to know: if you have a State Pension or a private pension how much State Pension and private pension income you will get this tax year (April 6 to April 5) the amount of any other taxable income you'll get this tax year (for example, from employment or state benefits) You cannot use this tool if you get: any foreign income Marriage Allowance Blind Person's Allowance Use this online tool at to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on here.
Daily Mirror
10-07-2025
- Business
- Daily Mirror
School holiday HMRC payments could be dished out to grandparents
Grandparents who are providing care may be eligible for HMRC help Older people looking after children under 12 during the summer holidays could get a boost to their State Pension payments from the HMRC. It could be worth £303 - and, incredibly, over a span of 20 years, that could potentially boost finances by more than £6,000. It can be achieved by claiming a National Insurance benefit from HM Revenue and Customs (HMRC). A single additional National Insurance credit can increase the full, New State Pension by roughly £303 per year. As highlighted by the Daily Record, for each week or part of a week that you care for a child, you will receive a Class 3 National Insurance credit. However, only one credit is available per Child Benefit claim, regardless of the number of children included in the claim. For example, if two grandparents looked after their daughter's two children, only one credit would be available for transfer. The recipient of the Child Benefit must decide who should receive the credit. However, if the grandparents also have a son and provide care for both their daughter's child and their son's child, it's likely that there will be two Child Benefit recipients - and so, two credits available for transfer. If no one has claimed Child Benefit for the child, there is no attached National Insurance credit to transfer and credits cannot be awarded. Who the National Insurance benefit is designed to help The details of the scheme might look intimidating, but it's meant for those who look after kids while the parents work, excluding the need for National Insurance credits from Child Benefit towards their State Pension. It's worth pointing out that retrospective claims for Specified Adult Childcare can be backdated to 6 April 2011. During the Covid-19 pandemic, if you cared for someone even via phone, text, or video call, you could claim Specified Adult Childcare credits to cover any National Insurance record gaps, as suggested by for the tax years 2019 to 2020 and 2020 to 2021. To receive the full New State Pension – currently at £230.25 per week or an annual sum of £11,973 – typically around 35 years of National Insurance contributions are required. A minimum level of 10 years of contributions is needed for a basic entitlement. However, this may vary, especially for individuals who were "contracted out". Find out more here. Eligibility criteria for the HMRC grandparent support The criteria for application says you need to be You are a qualifying family member who has provided care for a child under 12 You were aged between 16 and the State Pension age when you cared for the child The parent (or primary carer) of the child has claimed Child Benefit but does not require the credits themselves You are ordinarily resident in the UK, excluding the Channel Islands or the Isle of Man Approval from the child's parent (or primary carer) through their signature validating your application, ensuring you: Are entitled to the credits for the stated period Provided care for their child during the specified period Eligible family members include those who are the: Grandparent, great-grandparent or great-great-grandparent. Mother or father who does not reside with the child. Brother or sister - this includes half-brothers or half-sisters, step-brothers or step-sisters, adopted brothers or sisters, aunt or uncle Additionally, eligibility extends if you happen to be either the: Child of the current or former spouse, partner or civil partner of anyone listed above Current or former spouse, partner or civil partner of anyone listed above
