Tax on state pension

3 replies

prou · 16/05/2024 13:34

Hi everyone.

I chose to defer my state pension so will be getting a lump sum next year. How does the tax on that lump sum work? Many thanks.

OP posts:

Flossflower · 16/05/2024 13:53

Have You already agreed this? I defered my state pension but didn’t get a lump sum. I just get extra every payment.
I would image your lump sum will be added to your other earnings and your tax for the year worked out at your current tax rate. Your lump sum will not be tax free.

scrivette · 16/05/2024 13:54

I think that your lump sum will be taxed on your current tax bracket.

Flossflower · 16/05/2024 17:37

https://www.litrg.org.uk/pensions/state-pension/tax-state-pension/tax-deferred-state-pension-lump-sums#:~:text=For%20example%2C%20if%20your%20total,your%20state%20pension%20lump%20sum.

Tax on deferred state pension lump sums | Low Incomes Tax Reform Group

This page explains what tax is applied to a state pension lump sum, which you might receive if you reached state pension before 6 April 2016 but chose

https://www.litrg.org.uk/pensions/state-pension/tax-state-pension/tax-deferred-state-pension-lump-sums#:~:text=For%20example%2C%20if%20your%20total,your%20state%20pension%20lump%20sum.

Flip