Baffled By Suggested State Pension Amount

I started receiving my state pension in the 23-24 tax year. I've just completed my self-assessment online for that year. I had initially misunderstood the amount to enter for state pension received, thinking it should be the amount received rather the the amount "entitled". The amount pre-filled in the online form was £230 more than I'd actually received so I've been trying to work out where that amount comes from. Since I received £23 a day for that tax year the sums are easy. HMRC/DWP are suggesting that I was entitled to an extra 10 days of pension over and above what I actually received. Now, my last payment in the tax year was Thursday 28th March. An extra 10 days' worth of pension on top of that takes me up to and including Sunday April 7th 2024. Intriguingly, the state pension was uplifted on Monday April 8th (the first Monday on or after April 6th). So, it appears that the figure HMRC receive from DWP is the entitlement up until the day before the uplift. I contend that the entitled amount should be calculated up to and including April 5th. By my reckoning that's an extra 8 days after the last payment on March 28th. Which amounts to an extra 8 x £23 = £184. So, I hereby claim that the HMRC/DWP figure is wrong by £46 in their favour. I foolishly accepted the proposed HMRC figure when submitting my return, to save me having to explain why I think they are wrong. But I am minded to correct it and explain why I believe their figure is incorrect. Prove me wrong, people!

Hi,
This forum is for general queries only and is intended to help you self-serve. We are unable to provide specific advice tailored to individual circumstances.
You can contact our Self Assesment team for advice.
Self Assessment: general enquiries
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Thanks, but I'm not looking for specific advice tailored to my individual circumstance. Just trying to understand how HMRC/DWP came to the figure that was pre-populated on my SA online form. Because no-one seems to know. Including HMRC. I've done some more thinking. Maybe DWP work on a weekly basis only (and don't account for individual days), because the figure that was populated was exactly 28 weeks of payments from my 66th birthday. Even though the end of 28th week was April 7th. My birthday was on a Monday - don't know if that's significant. Maybe DWP's week starts on a Monday. Surely, my "entitled amount" should only go as far as April 5th. If that's the case, then the figure populated by HMRC is 2 days too much. That amounts to £46. Small potatoes, I know, but I still contend that it's not correct.

All of the information I've come across whilst trying to help my father fill in his tax return suggests everything is worked out in terms of weeks. Also, apparently the day of week is different for different people according to their NI number, according to https://www.gov.uk/state-pension/when-youre-paid

Hi,
Please see page TRG 6 of the following guide:
Tax Return notes
Thankyou

Hi,
As we would need to access your record to review this for you, you will need to contact our Self Assessment team for advice.
Self Assessment: general enquiries
Thank you.
 

I've consulted TRG6 link above which states that the State Pension figure used for the intermediate payment after the new tax year starts is 1 week at the old rate and 3 weeks at the new. This is incorrect in both the cases of my mother and myself - it's 2 weeks old and 2 weeks new. I raised this issue by post when I first became a state pensioner as the figure reported did not match the payments received and was told words to the effect that your birthday means you were due 8 weeks at the full rate. But the first payment had been a part-payment, not a full 4 weeks. HMRC should take the ACTUAL payment figures from DWP not some assumed amount. It seems likely that all tax-paying state pensioners are over-taxed because of these errors.

@Keith Cheasman Hi, I'm not HMRC Admin but might be able to help. I believe, based on your comment of 2 weeks old and 2 weeks new, you are still looking at when amounts are paid. For self assessment you use 1 week at the old rate and 51 weeks at the new rate. It is to do with when the entitlement to the benefit accrues. The first week you receive state pension it is paid from your birthday until the end of the week. It then runs on a weekly entitlement basis but the entitlement accrues at the end of the week rather than the start. So if your birthday was a Wednesday in the year you reached state pension your first week of state pension would be pro-rata from Wednesday until Sunday (including sunday). Then each week after would be on a Monday to Sunday basis. As opposed to it being based on the day you turned state pension age (Wednesday to Tuesday). But it is because of those rules (the basis the entitlement to benefits are gained) that it ends up being 1 week at the old rate and 51 weeks at the new rate. It needs to be that way to ensure fairness. Otherwise you would end up with a situation where two people are entitled to the same amount of pension but end up with different amounts falling into different tax years due to their day being a Monday and the other person's being a Thursday.

thanks but sorry, I still don't get it. I was never self-employed or self-assessing,. I refer to figures generated by HMRC on P800 forms. I fully understand that the payment only accrues at the end of the period. Not persuaded either re: week ending Sunday in the calculation ... My 66th birthday 2021 being Saturday Feb 6th and NI number dictating Wednesday payments, meant that my 1st payment (Weds March3rd) was 2 days (2/7ths of the weekly amount) short of a full payment. If their week ended on Sunday it would have been a full payment. The 2nd payment (full of course) was received on March 31st. So as assessed on April 5th I'd only received 54, not 56 days' accrued pension, yet amount used by HMRC was 56 days' worth, equivalent to taxing 2 days off my private pension. Since then, every year they tax an amount assuming one was born March 29th (would generate 1 week old and 3 weeks new rates for 1st payment?)! On this basis I'll be owed about £23 (+ interest!) at the end of the current tax year. Not a huge amount I grant you, £10 was those 1st 2 days. Why not use the REAL amounts paid in the tax year by DWP? Every other income stream is surely assessed that way? My mother, also born in the first week of a month, also gets this 2 weeks old + 2 weeks new calculation, as I've now discovered is the reason the the discrepancy in 'notional' vs 'actual' pension received.

Why not use the real amounts paid? Unfortunately I can only offer the rather unsatisfying answer that the government wrote the laws such that pensions are treated differently. I'm not sure if the underlying history that led to the laws being written in that way. In arriving at the figure of 54 days, it looks like you've measured the time from your birthday to the last payment day. You used the word accrued in describing it, but I don't think that's correct. The state pension accrues weekly - even though it only gets paid out 4-weekly. I count 8 complete Monday to Sunday weeks between your 2021 birthday and the end of the tax year... 8 weeks is 56 days. Add on the 2 days from the initial partial week makes 58 days... It almost seems like HMRC forgot to tax you on those 2 days' pension. In following tax years, you've said they followed the 1 week old rate, rest of year new rate pattern, which also is as expected for taxing full weeks as they complete and accrue.

@maxb So state pension doesn't start from one's birthday? I think there's millions of people under the impression that it does. The payment I received on the due Wednesday governed by my NI number equated to 2/7ths short of 4 full weeks which is why I then counted from Feb 6th to March 3rd (inclusive) arriving at 26 days, tallying with the payment received. I can fully understand the DWP needing a system to spread payment transactions over 7 days, which explains the 3 and a bit weeks, but not HMRC then assuming incorrect amounts paid to pensioners. May 2nd payment took me to March 31st not April 5th. And I didn't say the 1 week old + 3 weeks new was subsequently applying, I said 2 weeks old + 2 weeks new for the 'transition' period each new tax year.

@Keith Cheasman State pension does start from one's birthday, and I didn't say otherwise ("Add on the 2 days from the initial partial week..."). Based on information found in "How to fill in your tax return" found at https://www.gov.uk/government/publications/self-assessment-tax-return-sa100 combined with other information online about the effective date for State Pension increases each year being the first Monday of the tax year, I had come to the understanding that HMRC interprets State Pension as accruing based on a Monday-to-Sunday payment week, as that seemed the only way to make the various information make sense as a whole. However, I've just today come across https://researchbriefings.files.parliament.uk/documents/SN00260/SN00260.pdf which actually brings together some hard-to-find information about the changes over the years, and is causing me to reevaluate what I previously believed. Your 54 days figure now looks correct to me, and I speculate that HMRC have applied some incorrect logic based around whole weeks and earlier versions of the State Pension to arrive at 56 days.