Ok but based on comments by you 1 assume some one receiving say a SERPS pension gets their full tax allowance.
However I was unaware of this. I thought it could be at a more realistic level. That used to cost circa 15% of salary for 40years and 60% final salary with companies paying 1/2. Private schemes just did not compete.
When SERPS was originally introduced, the maximum benefit under the scheme was 25% of your earnings. In 1988 the benefit calculations changed, and the maximum benefit was reduced to 20% of average earnings. Employees could choose whether to opt in or opt out of SERPS.
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Contracted out people with a private pension who from financial advice contracted back in are likely to be higher earners.
In my case which started as a standard 2/3 of income at retirement age company scheme my contribution were tax free so tax is applied when I draw on it. The company also paid an equal amount. Property investment led to pension holidays for companies which is why funds now turn up that can't meet their obligations. Due to company sell offs my pension was simply moved to an insurance company. This sort of option isn't available now thanks to dear old Gordon Brown. Seems there was scope for abuse so once the taxation laws on fund value were changed companies that offered new employees the chance to join the scheme closed that option off.
So I assume that state pension payments are not made tax free neither are NI contributions. So why pay tax on income from them? Pass on if they are tax exempt or not.
It seems that all employed by the state still have a traditional pension scheme and there are traditional funds to provide the income.
Make me wonder if certain actions taken by the BofE during a financial crisis relate to these funds.
