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Reaching for the stars: the story of the higher rate pensioner

26 February 2024 / Neil Warren
Issue: 4926 / Categories: Comment & Analysis , ISA , savings , Income Tax , Pensions
Reaching for the stars

Key points

  • A retired former client has become a higher rate taxpayer on becoming a pensioner. How did this happen?
  • There are four possible reasons: triple lock; index-linked employment pension; high interest rates on savings; and frozen income tax thresholds. This will apply to more pensioners around the UK.
  • Since my client had received more than £10 000 from dividends or savings and investments he would have to file a self-assessment tax return.
  • I have in the past used different strategies to keep clients out of the higher rate taxpayer tax band.

When a former client telephones you ten years after you ceased to act for him your mind adopts an air of curiosity about the raison d’être for the call. And if the client is 88 years of age and says ‘hello Neil I think I’ve got a tax problem’ your attention levels inevitably...

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