Official Old Man
- Aug 27, 2011
- Thread starter
GT49er got it spot on. My tax code is indeed 1275. But my state pension is included in that £12750 meaning I can now only earn £5000 tax free. Don't get me wrong, I love my free pension but I'm still fairly fit and want to carry on working. But my tax bill is increasing due to the pension payments. Surely it would encourage OAP's to carry on working if the pension was not included in taxable pay, change the tax code to 1975.Pensioners don't pay tax - well, not on their state OAP anyway - it just counts towards the same tax free allowance that everybody else - everybody else!- has. The tax threshold is £12,750 per year - if your income is less than that, you don't pay tax, period.
The OAP is roughly £7.5K per year - if that's all your income you don't pay tax. If you earn, or have other income of £5K on top of your pension, you still don't pay tax. More than that, and you're through the tax threshold - every £ is taxed after that, but none of the basic tax free £12,750.
ps It's way past my bedtime. Horlicks anyone