HM Revenue and Customs (HMRC) has sent out an update to people who are getting the state pension about any taxes they might have to pay in the new financial year.
Thanks to the triple lock, people who get state pensions will now get more money. This month, payments will go up by 4.8%.
The full new state pension has gone up from £230.25 to £241.30 a week. This is one of the biggest increases since the triple lock system was put in place in 2011.
Because of this, the tax office has put out information saying that state pension payments come without any taxes being taken out at the source.
Pensioner looking at letter and HMRC letter HMRC has issued a state pension update | GETTY HMRC made it clear that the Department for Work and Pensions (DWP) sends these payments directly, and the full amount is deposited into the bank accounts of those who receive them.
People who get the full basic state pension will now get £184.90 a week. Payments are made every four weeks instead of every month. This means that people who get the full new state pension will get £965.20 every four weeks.
The DWP sends these payments late, and the last two digits of a person’s National Insurance number tell them what day they will get them.
People with National Insurance numbers that end in 00 to 19 should expect their money on Mondays, and those with numbers that end in 20 to 39 should expect it on Tuesdays.
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Graph of state pensions How much will the British taxpayer have to pay for the state pension triple lock? Kate Smith, Head of Pensions at Aegon, said, “If the amount goes over this limit when it goes up again next year, part of the state pension would be subject to the basic 20 percent rate of income tax.”
She said that even a 2.5 percent increase would bring the yearly total to £12,861, which would mean a £58 tax bill.
Chancellor Rachel Reeves has said that people who only get money from the state pension will not have to pay income tax during this parliament. However, Smith asked for more information on how this would be done in practice.
