Taxation of state pension
The state pension is liable to income tax, though pensioners are unlikely to pay tax in practice if their only income is the state pension.

A viral email claims that "illegal immigrants/refugees living in Britain" receive significantly more financial assistance from the Government than UK pensioners. The email originates from abroad and the figures quoted do not reflect the true situation in the United Kingdom.
Viral emails protesting about financial assistance for "illegal immigrants/refugees living in Britain" (363 KB , PDF)
Members may be contacted by constituents complaining that “illegal immigrants/refugees” in Britain receive significantly more financial assistance from the Government than UK pensioners, citing an email.
It alleges that “if you cross the British border illegally you get a job, a driver’s license, pension card, welfare, credit cards, subsidised rent or a loan to buy a house, free education and free healthcare.” It also suggests that “illegal immigrants/refugees living in Britain” are entitled to financial assistance worth up to £29,900 per year, in contrast to pensioners who, it says, receive only £6,000 a year in benefit. More recent mutations of the email do not include the former statements but still make claims about cash entitlements for the respective groups.
The House of Commons Library first became aware of the email in early 2010 but it has a much longer pedigree. It contains text from a protest email which has been circulating in Australia for some time now, but which may have originated in Canada. Versions also circulate in the United States, and elements even appear in protest emails as far afield as India. The UK version has been adapted, somewhat crudely, for a domestic audience by someone or some organisation unknown. The figures quoted bear no relation whatsoever to the situation in the United Kingdom.
As long ago as October 2007 the Refugee Council of Australia advised Australians to ignore an almost identical email to the one now circulating
in the UK, describing it as “blatantly inaccurate and intended to create resentment towards refugees and fuel disharmony.” The Australian Department for Immigration and Citizenship has also attempted on more than one occasion to refute the claims in the email, but it continues to circulate, in various guises, and receives regular attention on talk-back radio shows and internet discussion forums.
This note gives details of the email, and looks at its origins. It also gives information on actual entitlements for immigrants and pensioners in the United Kingdom.
Viral emails protesting about financial assistance for "illegal immigrants/refugees living in Britain" (363 KB , PDF)
The state pension is liable to income tax, though pensioners are unlikely to pay tax in practice if their only income is the state pension.
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