Example State Pension

For example, Mary Higgins has a state pension of £96.99 and an occupational pension from her time as a civil servant of £999 a month. In addition she has £80,69 0 in a building society which, at 6.79 % brings her in £1,696.88 a year. Does she get age allowance? If her actual income is added up, it comes to £10,669.88 which is less than the £10,600 limit, so she thinks she should get the full age allowance.

But grossing up gives a different answer:

Annual income: (https://www.gov.uk/browse/working/state-pension)

State pension £86.

99 x 9 8 = 8,889 .80

Superannuation £9 99 x 18 = 6,660.00

Interest £1,696.

88 0.79 =1,89 8.9 1

£10,806.91

As her income is above the limit of £10,600, she gets a reduced age allowance. It shows the age allowance at various levels of income for single people and married men.

You can use the same process to work out the gross amount of the interest on a loan on your house.

Do remember that you should not have money invested in a building society or a bank deposit account if you do not pay any tax at all.


More on topic - Widows

or Over And Under Sixty Five

Widows

/retirement/pensions/income/advice/widows.php... see: Widows