The public is being given its fair share of scare stories about July 4th. 
They can be forgiven for being confused as to whether the triple lock is taking more than it is giving, whether pensioners are the greedy parasites feeding on the working population or the hapless victims of a future Labour Prime Minister.
Tax is the issue , but not the obscure niche tax that nobody but a handful of the wealthy have been worried about. The election is being fought not over the Lifetime Allowance but over income tax on the potential for the state pension to exceed the personal allowance.
Those who think that pensioners don’t pay tax have a pretty loose grip on reality. But there is enough disinformation being peddled in our newspapers to turn a few heads. This is unedifying stuff from a Prime Minister who once was a hedge fund manager.
Will this constant argument over intergenerational transfers do yet more harm to the fragile understanding of pensions? As if pensions haven’t already been damaged enough by pension freedoms, they are now becoming the frontline for a low-level political spat.
If pensioners don’t pay taxes, could I have back the 29.9% of mine that I have just paid?
Dear Henry
The issue is a practical one and revolves around the older poorer pensioners, who have no income beyond their state pension. Unless they adopt this kind of policy, or fundamentally change the way the tax system works for pensioners in a different way, any Government coming next would have to adopt this policy, so it is a shame that is has become political. I’d rather see the tax threshold raised for everyone, but if that does not happen and the state pension rises above the personal tax threshold (which is already has for those who share the married couples allownace), there will be a tax nightmare to cope with.
The practical problem is that millions of pensioners, many elderly, would be required to complete a self assessment tax return and many would not know they need to do this, others will struggle to cope with the complexity and ultimately HMRC would levy fines or penalties on older people, just because their state pension had exceeded the personal allowance. Most of these people will never have filled in a tax return in their life, as PAYE did that for them.
As I understand the practical administrative situation, those who have a private pension or are still working and those reaching state pension age since 2016 (only those around age 70 or younger) will have their tax sorted by their pension provider, or could get a Simple Assessment tax bill from HMRC, which means the practical issue for them is not stark. But millions of pensioners without a private pension or on the old system would, as I understand it, be forced to fill a self assessment form themselves. They won’t have an accountant to help either.
Or in theory of course DWP as the payer could implement PAYE.
In practice I suspect they’d be incapable of actually doing that!
Well done Ros you tell them. I hope that these proposed new policy will not defraud my FAS/PPF pittance that the last century flawed rules of the government’s Financial Assisted Scheme that was never amended to align with the Parliamentary Ombudsman report and Judicial reviews bothy rejected by the House of Commons!