Did you know you get taxed on your Pension?

The Old Grey Linnit hit the big 65th birthday this month and took receipt of the long awaited Old Age Pension.

Following much gentle ribbing from family, friends and colleagues Old Grey settled down to count up his income and try to work out just how 'retired' he can actually be without any significant adjustment to our desired standard of living. He has a works pension from when he worked for local government (22 years contributions from 22 years full time work with no leave for sickness at all - well done!). He also has a smaller pension for a further 18 years self employed (this 18 years worth of contribution did get interrupted by 2 months recuperation following pleurisy and a collapsed lung and another month recovery following heart attack and surgery).

So, forty years working full time and paying full tax, NI and pension contributions.

Are the Government pleased with Old Grey? Is he rewarded for 40 years full time work, no claiming unemployment or sickness benefits or any other such handout?

Do you know, I think they are mightily please - 'cause he's presented the State with ANOTHER means to bleed him financially. Rewarded? Is he heck-as-like!

First of all we receive a letter telling him his annual State pension will be reduced by £16.95 because prior to 1980 he paid a reduced tax contribution.... utter rot. Old Grey has always paid full contributions. So now we have to contest that through the horrible bureaucracy of the Tax Office. THEN, we get another letter from the Tax Office advising him of the tax due on his pensions - described by them as 'unearned income'.

How on Earth does any pension that a man has accrued through 40 years manual labour get described as 'unearned income'? I am stunned that a man who has never claimed a penny from the state, who has worked and contributed so much to this country's economy can be penalised.

I'd laugh if it wasn't so sad. If it wasn't such a poor reflection on our society that men like Old Grey get taxed unto the grave and others who haven't worked a day in their lives milk the state for every penny they can. Pennies that Old Grey put there!

Old Grey's older sister is now 72 years old. A widow who worked full time from when she was 15 until she retired at 65 (she carried on working to help he company out - they pleaded with her to continue working as a trainer after her legal retirement age of 60) tells me that she is sent tax forms still, every year by the Tax Office. And every year she has to fill in masses of paperwork reiterating her pension details, the same details every single year, so that they can continue to tax her hard earned pension.

Oh how we respect our older community. I almost regret being a working woman. Seeing what Old Grey and his sister are penalised with in their retirement years, I wonder if we wouldn't have been better off living off the state....