Workers over 65 ‘being taxed on their state pension’

Pension piggy bank

 

 

Up to half a million workers could be paying unnecessary tax on their state pension, according to research from Royal London.

 

Around 1.1 million over-65s were in employment in 2017, with roughly 950,000 of those receiving a wage alongside drawing their state pension.

 

The mutual insurer claimed up to 520,000 of these were earning enough money to take them into the higher-rate income tax threshold, resulting in their entire state pension being taxed.

 

Over-65s who opt to continue working past their state pension age have the option to defer access to their state pension until they officially retire.

 

Royal London cites that those who defer their state pension can receive an extra 5.8% a year on their pension for each year they defer.

 

However, those who are claiming their state pension while continuing to work do have the option to ‘unretire' by asking the Department for Work and Pensions to stop paying it.