How much tax do you pay on your Royal Mail pension

[markis]

I am receiving my 60 years pension and the letter states that I will receive £258.36 every month. But when this is paid into my bank account it is £210. Why is this ?

[July 1981]

20% tax as I assume you’re still working, you don’t pay National Insurance on your pension.

[Wullie10]

Yes you have to pay tax my friend. Its Astonishing how many people don't realise this when they send you a figure. I pointed this out to a bloke at work the other day and he was quite shocked . Deduct 20% from the final total they give. Unless you're still working and are in the 40% bracket

[markis]

I think more people need to be informed about the 20% tax as for every £1000 your only getting £800 so when you get your pension estimate you will have a better understanding.

[NorthernBoy]

I think more people need to be informed about the 20% tax as for every £1000 your only getting £800 so when you get your pension estimate you will have a better understanding.

There has been suggestions that long term that pension income will get taxed at the same rate as those paying national insurance, eg 28%. The argument being that large number of pensioners are wealthy and use more of the nhs and should therefore pay more.

Not saying this will happen anytime soon if at all, but it’s certainly possible.

[freespeech]

I think more people need to be informed about the 20% tax as for every £1000 your only getting £800 so when you get your pension estimate you will have a better understanding.

Depends......if you have no other income £1000 a month would be tax free as it's under the personal threshold.

[Wullie10]

I think more people need to be informed about the 20% tax as for every £1000 your only getting £800 so when you get your pension estimate you will have a better understanding.

There has been suggestions that long term that pension income will get taxed at the same rate as those paying national insurance, eg 28%. The argument being that large number of pensioners are wealthy and use more of the nhs and should therefore pay more.

Not saying this will happen anytime soon if at all, but it’s certainly possible.

Under the so called government of the working people it is quite possible. They seem to despise anyone who has worked and saved a little for retirement. Their own gold plated pensions will never be under threat that's for sure.

[Wullie10]

I think more people need to be informed about the 20% tax as for every £1000 your only getting £800 so when you get your pension estimate you will have a better understanding.

Depends......if you have no other income £1000 a month would be tax free as it's under the personal threshold.

We assume as postmen take pensions at 60 and 65 a good few will carry on working. An average Royal Mail pension and state pension will certainly take you over the threshold.

[barcajr]

Because as you're still working, the pension is classed as earned income and so income tax has to be paid which is 20%

[RobertT]

Any income over the Personal Tax Allowance, the standard rate of which is currently £12,570, is taxable. That applies to any wages or pensions you may have, including the state pension.
The basic rate of income tax is 20%.

But in practice that allowance can vary due to other circumstances!
For example: Posties will get the RM uniform cleaning credit which increases that figure, and changing jobs or retiring can also affect it.

Just take a look at the tax code on your pay slip and add a 0 to the end, and that's how much income you can earn before you pay income tax.

Any income over £50,270 is taxed at 40%.