Older people with only the State Pension as their source of income will not pay income tax.
The New and Basic State Pension s will rise by 4.1 per cent from next April while additional elements are set to increase by 1.7 per cent. Under the Triple Lock, the New and Basic State Pension s 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.
Anyone who doesn’t pay tax automatically pays tax through deductions, would receive a tax bill from HMRC the following summer to be paid by January in the next year. There has been a fair bit of speculation on the number of pensioners who will pay tax, but currently of the 12.7 million State Pensioners across the UK, nearly 8m already pay some tax in retirement, so this isn’t something new.
Retirement Personal Finance Taxes Tax HMRC
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