40% Tax on your pension.

Discussion in 'RLC' started by Conductor, Apr 26, 2012.

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. In the last budget, much was made of your basic personal allowance being raised to £8k but little was made of 20-40% threshold being lowered by £3k. Now I pay Tax at 40% on my pension.

    For those of you who are still serving, be warned, that golden challis called the pension is only any good to you if you are in employment. If your out of work it will bar you from all benefits that may be available.
  2. I have been drawing my pension for 17 years now, and have been out of work a couple of times, and I can tell you that being barred from lining up with the chavs and pikeys down the job centre 'cos I make £ a week before getting out of bed is not a problem for me. The best advice is...use your gratuity to pay the mortgage down..not for a new car, a boat, and a world cruise.
    • Like Like x 2
  3. Hmmm, you're ex conductor and you're crying like a private.

    Shall we do this correctly.

    You're pension is counted as an income and subject to tax. As are the WAGES you earn on top of the pension.

    You like most In the country are subject to:

    A personal allowance: so you don't pay tax on the first £8,105

    20% Taxation on anything you earn upto £34,370.

    40% Taxation on on anything between £34,371 - £150,000

    45% Taxation thereafter.

    So, you're no worse off than anyone else and a damn sight better of than most. Your pension is unaffected, because it alone does not bring you into the 40% bracket.
    • Like Like x 4
  4. Brotherton Lad

    Brotherton Lad LE Reviewer

    You could get a job earning less money and reduce your tax bill that way. Spend more time with the family.
  5. Dingger I will treat your opening comment with the contempt it deseves. Nothing like being personal and abusive in your opening comment. However your correct with you figures.

    The point I'm tying to make is, with no change to my income over the last 12 months I now have to pay 40% on part of my income which is a net loss. Savings accounts are not worth alight. Inflation is reducing the value of what you do have. it seam like we are in melt down.

    When I was demobed, like now there was very high unemployment in the North West, and the people next door had been unemployed for 25 years. They all the benefits, interest on the mortgage was being paid along with every thing else. my commuted pension stopped all benefits except £12.40 job seekers a fortnight (15 years ago).

    My only point is that the pension can stab you in the back. its only any good to you if your working other wise you could regret having it.
  6. Ah what price memories though?
    • Like Like x 1
  7. PMSL very good :)
  8. I think you're a disgrace for whinging about being paid so much that it puts you in the 40% tax rate. By being so you're in the top 10-15% of earners within the UK - you should consider yourself lucky.
    • Like Like x 6
  9. I think Dinger has earn't the right to be personal and abusive whenever he likes.............................................................especially with the manufacturers of those 'Bomb Proof Boots' he bought before he went to Afghan!

  10. Well, as the saying goes, if you're looking for sympathy - it's in the dictionary between shit and syphilis...

    Anyone in the public sector (including the Forces) has endured the past two years with no inflationary payrise, and can look forward to a desultory 1.5% for the forseeable future.

    Therefore anyone whose pension puts them into the 40% band, and continues to recieve an uplift each year based on CPI, is unlikley to find much in the way of of a shoulder to cry on in here...

    Now, where is Stacker when you need him?
    • Like Like x 3
  11. How vile it musst be to have that pension stab you in the back, truly wicked. The rest of us will be working longer, paying more and getting less, trot along.
    • Like Like x 2
  12. Derisory?
  13. Conductor, you are whining because you earn enough to have to pay 40% tax.

    Do you seriously expect any sympathy?

    The pension you receive will be paid to you for the rest of your life. NOt a bad deal. its backed by HMG and you'll get it with no further effort from you at all.

    I'm pretty certain you don't pay 40% tax on it, but you might pay 40% tax on *part* of your overall income. You do NOT pay National Insurance Contributions on your pension. Its likely that next year you'll have a personal allowance of £10k.

    If you are getting paid an income from employment and the 40% tax rate is such a God-awful burden for you to bear, make a personal pension contribution which will give you tax relief at your marginal rate of 40%.

    Alternatively, give some £ to BLESMA, H4H or the ABF and get that nasty 40% burden relieved as above.
    • Like Like x 4
  14. Desultory, derisory, disappointing, dogshit.

    All of the above apply.

  15. That really was wicked.........good,but wicked! ;-P