Pension question.

[Gary L]

a quick question for all you old (and not so old) people

Can a person claim a full basic state pension and a private/company pension at the same time. would the non state pension affect the amount of the state pension?

so say the state one was £100 per week and the other £50 a week.
would someone then have £150 per week
or £50 knocked off the £100 so a total of £100 per week.

[Hugh]

Ask and ye shall receive...

HMR&C

If you are 65 or over and your income is between £24,000 and £100,000

If your 'adjusted net income' - read more below - is over £24,000 (the income limit for age-related allowances) but not more than £100,000, your age-related Personal Allowance is reduced by half of the amount - £1 for every £2 - you have over the £24,000 limit, until the basic allowance is reached. So if, for example, you're 66 and have income of £24,500 - £500 over the limit - your age-related Personal Allowance is reduced by £250 to £9,690.

But in your example, you would keep the £150, as this is below £24,000 pa (£150 x 52 = £7,800).

£24,000 = £461 per week, and the state pension for a single man or woman is £102.50, so you could have a private pension of around £350 per week before they started reducing your state pension.

However, you would be taxed on any pension above £9,940, at a rate of 20%.

[Gary L]

So based on the £24,000 pa. we're talking a total income of a maximum of £461 pw?

Thanks Hugh. I'll pass it on to the old person

[Taf]

I thought that every £1 of private pension reduced the state pension by £1 ?

Or have they changed that again? My pension (RAF) starts in 3 years and I was told that that was the case only a couple of years ago.

Give with one hand, take with the other.

[Hugh]

Originally Posted by Gary L

So based on the £24,000 pa. we're talking a total income of a maximum of £461 pw?

Thanks Hugh. I'll pass it on to the old person

Not quite - anything over 10k (roughly) gets taxed at 20%; so the 14k over the first 10k gets taxed at 20%, reducing it by £2,800 PA.

[Mr_love_monkey]

never miss a chance to tax people...

[joglynne]

... and if you have a couple of private pensions on top of your state pension keep a close eye on the tax codes sent out to the private pension providers as the Tax Office has a bad history of getting the coding wrong and always in their favour.