Tax when you retire

[Celtigra3]

I am retiring at the end of March 2012. With my state pension and private pension I will be above the limit of personal allowances. I have been onto the tax site and can't make head or tail of it. It seems very complicated as I would like to work out how much I am going to be stung for. Does anyone know of a site that is user friendly?

[chelle7272]

the directgov site is uaully pretty good;
http://www.direct.gov...anceright/DG_10014681

Hope it's helpful to you.

[craft1948]

The personal allowance is somewhere around 7475 so if your state pension is say 5000 your personal tax allowance on your private pension will be 7475-5000 = 2475.

[ubasses]

The easiest way is to add up your state pension & private pension take away the tax allowance and multiply whats left by the standard tax rate. As state pension cannot have tax deducted from it your code will be adjusted so that all the tax will be deducted from your private pension, and the stat pension received gross.

[dzug2]

A simplified version - you will pay 20% tax on your total income less the personal allowance.

As tax cannot be deducted at source from your state pension it will all be charged to your private pension.

[Celtigra3]

Thanks everyone - that's a big help - I need to work out how much I will have every month.....cos I will be poor!!!!

[twix123]

In the Tax Year that you are 65, and for the following 10 years, your tax allowance will be increased by £2,015, which goes some way to mitigating the tax payable on your State pension. After age 75 the tax allowance is increased by a further £150 per annum.

[Old_Geezer]

Sound like I can't retire soon then. I thought it was all a lot easier than that. How much did you get ? How much do you have left ? Send it !

[ubasses]

One thing to remember, if all your income added together goes over £24,000 your tax allowance will start reducing.

[craft1948]

^ Mine hasn't............