pensions and taxes

It does seem very unfair that your state pension or any company pension you are in receipt of when you retire is classed as income and you can be taxed if this 'income' takes you over the threshold level. It appears though that more and more people are having to continue to work even when they reach retirement age as their income is just not enough to support them. I think the threshold should be increased.

I'm planning on retiring next year, so have taken quite an interest in this issue. Personally I don't think paying tax is about whether or not you are working or retired. It is about what your income is. If your income is below the tax threshold then obviously you won't be taxed. If it is above the threshold, then the whole point of the tax system is that you pay tax! The economy would collapse if no-one paid their taxes, since 'government' money is only the money we all pay in taxes. Just because someone retires, it doesn't mean that they stop using public services, so why shouldn't they pay for them. I will fully expect to continue paying tax the Monday after I retire on the Friday because my use of public services won't change - in fact it might increase!

I agree that perhaps the threshold should be increased but I also think it's right to continue to pay taxes regardless of whether you are retired or not. After all if you aren't receiving enough to take you to the threshold you won't pay any anyway. My mum, long retired, has always been glad to be in a position to pay taxes as she says it proves she isn't in poverty and for many, many years she was.