Same thing happened to me. Someone said "Don't spend it all at once"!
At the end of my second year as an Apprentice, for passing exams at Tech. I was awarded an extra two shillings a week. My Income Tax deduction promptly increased by one shilling and eight pence!
In those days, Income tax was like Joseph's coat, with many bands.
One of my pensions is £8.10, GROSS PER ANNUM, £6.10 NETT. The Insurers now managing it, offered to commute it to a one off lump sum payment of £56. Since I hoped to live for longer than seven years, I chose to take the Pension. Fourteen years on I think that may have been the right decision!
Our nation is very even handed; gives with one hand and takes away with the other!
But let us be grateful for small mercies.
Howard