What is the �9030 tax threshold for single pensioners?

[johnny37]

I keep reading about this. I thought the amount under which you do not pay tax is �5400 for everyone regardless. What does the figure of �9030 for single pensioners mean?

[LoftyLottie]

The tax threshhold goes up automatically for people receiving state pension at age 65. The threshold was �7280 is 2007 and under the 2007 budget is to rise to �9970 is 2011 (and is more for people of 75).

[LoftyLottie]

'in' not 'is'. I made the same mistake twice.

[johnny37]

I have just spoken to the tax office. The basic allowance is �9030 for people over 65.. Then, for every �2 of income that you have over �21800, �1 is deducted, down to the threshold of �6035. I find this baffling but it looks like you are penalised for having investment income that has already been taxed. The gaulieters at number ten would say this is to help people pensioners on low incomes but - honestly!!!!

[LoftyLottie]

Too true johnny!!

I am a pensioner - one of those ladies that could retire at 60 with a state pension. However my threshold is not that of a pensioner until I reach 65, so I was (until recently) paying income tax on my state pension! Fantastic!!

Can't win can we?

[johnny37]

Ive been trying to fathom this out. I think it means up to �9030 youpay no tax. Up to �21800 you pay up to �600 less tax. After that the rebate reduces on a sliding scale until nothing is left to rebate which happens at �27800. With respect to those less fortunate it makes a mockery of saving all your life. Even if they abolish tax on investment income for pensioners, it will still be taxed under this rule. Who comes up with these figures?

[buildersmate]

Gordon did, when he lived next door.

[Skyline D]

I've never really understood why pensioners should particularly get additional personal allowances anyway. It's a real bonus for them.

And I certainly don't especially see why someone retiring at 60 should suddenly get some sort of additional tax allowances as a result LoftyLottie? Why shouldn't you pay tax on your pension. Someone earning the same amount would pay tax on it.

[LoftyLottie]

I am not asking for an additional allowance. The tax allowance is additional for people of state pensionable age. I happened to reach pensionable age at 60, there are still a group of women who fall into this category. I paid the right number of contributions which entitled me to get a full state pension at this age, yet am excluded from my additional allowance. Noone should have to pay income tax of a basic state pension.

There has actually been a great deal of publiciity about this.

I am surprised you think I am asking for anything extra.

[Skyline D]

Well yes you are asking for something extra. You haven't got it now and you want it. What better definition is there of asking for something extra?

You are asking for additional tax allowances to kick in at 60 instead of 65 because you've opted to retire at that age. I know you are entitled to retire at that age and that you will be fully paid up but I don't especially see why someone who opts to retire at that age should get extra personal tax allowances than someone who doesn't but makes the same amount of top line income. It's inequitable.

The additional tax allowance as it exists is for people over the age of 65, not for people of state pensionable age.

I don't really see why "no-one should have to pay tax on a basic state pension" but someone of the exact same age who earns the exact same amount in paid employment SHOULD? There's no real justification for it.

Anyway, as I said initially, I don't really understand why pensioners get additional allowances anyway? Except of course that it would be a complete vote loser in this increasingly "grey" state to attempt to remove it.