Changes to state pension could cause issues for some claimants
Up to 400,000 pensioners are set to receive warning letters from HM Revenue and Customs this month over a new bill.
"With an 8.5 percent increase in state pension from April, pensioners receiving over £242 per week may enter the tax net. The frozen tax threshold of £12,570 heightens the risk of unexpected tax demands." State pensions are paid gross, without any tax being deducted at source, which necessitates HMRC employing the "simple assessment" process. At the end of each tax year, the Department for Work and Pensions reports the total state pension received by individuals to HMRC.
Therefore, pensioners might need to consider putting a part of their state pension aside each month to ensure they can manage any potential tax liabilities in the future.
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