'P60-style pension update needed'
Published on 25 January 2013 11:30 AM
Older people should be given P60-style statements every year to help them better understand their financial situation, an advisory group has suggested.
Taxable income from the state pension and other benefits would be detailed in the Department of Work and Pensions form known as the DWP60, according to the suggestion by the Office of Tax Simplification.
Such a document would ensure people know exactly how much taxable money they receive, mirroring the P60 form given out by pension providers and employers.
The independent office says it came up with the recommendation, which has now been lodged with the Treasury, after gauging the opinion of groups of older people.
Bank and building society account holders should also be given adequate guidance about the tax applied to any interest earned, and lenders should ensure annually that the tax status on individual accounts is correct.
'Stripping away complexities'
The advisory group's tax chief, John Whiting, said: 'Pensioners have told us many times how the tax system gets more complex as they get older. We have to work within our brief to be revenue-neutral but we think our recommendations could make a real difference in stripping away complexities and giving pensioners information that will help understanding and make it easier for them to deal with their obligations.'
The Low Incomes Tax Reform Group welcomed the recommendations which come at the same time around nine million workers are automatically put on workplace pension schemes.
Chairman Anthony Thomas said: 'Pensioners on low incomes need far more support than they are currently getting to navigate what has become a highly complex tax system. In this report, the OTS (Office of Tax Simplification) has produced some well thought-out recommendations which should simplify the tax system for many pensioners. We welcome the recommendation of a DWP60.'
Meanwhile, the Government says it plans to introduce a 'single tier' state pension.
Copyright Press Association 2013