Pension Amount Without Tax Obligations

How much pension one can potentially receive - exemption from paying taxes involved - Here's the paraphrased text:

In 2024, significant changes are being introduced to the taxation of pensions for new retirees in the UK. The changes aim to create more fairness in savings for retirement and encourage younger people to save privately.

According to the Growth Opportunities Act, full taxation of pensions will not apply until 2058. This means that in 2024, new retirees can enjoy certain tax benefits.

The tax-free allowance for pensioners in 2025 stands at 12,084 euros. For new retirees in the same year, the tax-free amount is slightly lower, at 1,323 euros per month. However, in 2024, new retirees can receive a maximum annual pension income of approximately 16,853 euros (about 1,404 euros per month) tax-free; after considering allowances and deductions, income up to 12,096 euros remains without income tax liability.

Anyone who had more than 11,604 euros in pension income in the previous year 2024 must file a tax return. Retirees can deduct advertising cost allowance, special expenses allowance, and retirement provisions from their taxable pension income.

The tax office checks if new retirees can have a higher total income than the tax-free allowance without paying taxes on a case-by-case basis. For example, in 2024, only 13,481 euros of the 16,243 euros gross pension for new retirees is subject to taxation.

Older retirees who started receiving their pension in 2005 could receive up to 19,758 euros tax-free. Long-term retirees who retired as early as 2005 can still receive 50% of their pension income tax-free, resulting in a higher tax-free monthly amount of 1,610 euros.

The taxable proportion of the pension for new retirees in 2024 is 83 percent. The tax-free allowance for new retirees decreases gradually each year due to the adjustment of pension taxation.

The Ministry of Finance has listed the tax-free pension amount for new retirees in 2024 as 16,243 euros for singles, and double for couples. These changes are part of a broader effort to encourage more people to save for their retirement privately and ensure fairness in the taxation of pension income.