State pensioners warned ‘you could be penalised’ over £492 rule
A fresh state pension warning has been issued following an analysis that found claimants could be "penalised". The report from pension consultants LCP said that people putting off their state pension to earn a little extra are likely to see it taxed under new rules. This is because the state pension is set to grow larger than the personal allowance from 2027, meaning some of it will be subject to income tax.
TL;DR
- Individuals delaying their state pension may be penalized by new tax rules.
- The state pension is expected to exceed the personal allowance (£12,570) from 2027.
- Those who defer claiming their pension under the UK State Pension 'increments scheme' could be taxed.
- This scheme increases payments by 5.8% for each deferred year.
- A tax waiver for pensioners wholly dependent on the state pension may not cover those with increments.