Overview
- HMRC used X to tell people approaching retirement to learn three key facts about how their income is taxed in later life.
- Officials said tax in retirement works the same as at work, with up to £12,570 tax free and anything above taxed at standard rates.
- The state pension counts as taxable income and is added to any work, personal or workplace pensions, savings, and investment income to set your total.
- The full new state pension is £241.30 a week, about £12,547.60 a year, so even about £30 from other sources can create a tax bill for those on the full rate.
- The OBR expects about 600,000 more pensioners to start paying tax, as the Chancellor assures people with only the state pension will not be taxed, and the state pension age moves from 66 to 67 over the next two years with entitlement tied to National Insurance records.