Age-old issue

The State Pension age changed for both genders from April 2010.

For women, if you were born before 6 April 1950, then your State Pension age is 60. However, if you were born after this date, then your State Pension age will gradually increase.

For men, if you were born before 6 April 1959, then your state pension age is 65. However, if you were born after this date, then again, your State Pension age will gradually increase.

Under current law, pensioners of both genders could be up to 68 years old before they retire in future.

Once you reach State Pension age, you will no longer have to pay National Insurance contributions. As for tax, you get an increased personal allowance if you are 65 and over (currently £9,940), which means you can earn up to this limit without paying any tax. Income above this level will be taxed as normal.

Please be aware that there is an ‘income limit’. If you earn in excess of this limit, your personal allowance will be gradually be eroded away to the basic personal allowance.

Your local TaxAssist Accountant would be happy to discuss your tax affairs with you.

 

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.