Pension advice

[ren531]

I decided to not combine my three workplace pensions, I was going through the process and was advised I should view the move as a long term investment of 5 years or more but will want it before then, plus the charges are slightly less if I leave them were they are.

 

[SpokeyDokey]

Always worth bearing in mind.

Pension death benefits taxation link:

https://www.gov.uk/tax-on-pension-death-benefits

 

[slowmotion]

The free pension service advice (via telephone) i received last year upon becoming eligible - by turning 50 - was a complete waste of time if I’m honest.

Repeatedly came out with the ‘we are not financial advisors’ type spiel and generalised about most points I asked on, didn’t appear willing or able to comment on my situation specifically; ending with a summary being sent to me by email which included links to various general online information I likely could / would have found myself had I searched.

If it was offered it again I genuinely wouldn’t bother. All it did for me was (perhaps) reiterate the fact I needed to put more aside to provide the pot I needed to retire comfortably when I intended. Which I’d already worked out without their ‘help’ anyway……

If my experience is typical I can’t answer.

Good luck !

My experience with the free pensions advice service was similarly entirely useless.

 

[sevenfourate]

My experience with the free pensions advice service was similarly entirely useless.

Interesting.

I'm a soft old soul at times - and after the telephone conversation had ended; i did wonder if somehow it was 'me' ?

Genuinely, pretty much a complete waste of an hour. That would have been far better spend Googling anything you wanted to know yourself. Or doing overtime at work in that hour - and putting monies earned toward proper, personalised advice imo.

 

[brucers]

Merging pensions may depend on what type dormant ones are. If the pensions are well thought of ones then moving them could be risky.
I think I am right in saying SIPPs money is govt protected Upton £85k (like money in Banks).
Health comes into it too, if you are very unhealthy, say, and have not long to live, then buying an annuity would not seem a good idea!

 

[PaulSB]

Rather than start a new thread. I've received my Pension Service letter re State Pension from April '23. As I have a weekly protected payment following SERPS my total SP will be marginally above the Tax Free Allowance.

I think state benefits are free of tax. Are they and if not any ideas on how HMRC will collect tax?

With the new SP at £10600 from April I imagine a lot of people might fall into this bracket?

 

[cisamcgu]

Basically, pensions are taxed just like any other income - State Pension is just like a salary and you will PAYE your tax

 

[13 rider]

Rather than start a new thread. I've received my Pension Service letter re State Pension from April '23. As I have a weekly protected payment following SERPS my total SP will be marginally above the Tax Free Allowance.

I think state benefits are free of tax. Are they and if not any ideas on how HMRC will collect tax?

With the new SP at £10600 from April I imagine a lot of people might fall into this bracket?

With the budget in March there is a possibility that the tax threshold will be raised and your calculations will change
Do you have a private pension ,normally your tax will come off that

 

[SpokeyDokey]

As #37 - SP is treated as income like any other income source.

 

[SpokeyDokey]

With the budget in March there is a possibility that the tax threshold will be raised and your calculations will change
Do you have a private pension ,normally your tax will come off that

Tax threshold is locked until 2026 AFAIK.

Stealth tax!

 

[Alex321]

No, state benefits are not free of tax. They are counted as part of your total income, and if the total is more than your personal allowance, you will be taxed on anything above that.

If the state pension is your only income, you will have to fill in a self-assessment form and pay the tax resulting from that.

If you also have a private pension, they will deduct the relevant tax before paying you, and will include the state pension you receive in their calculations.

Not sure what happens if you have multiple private pensions.

 

[13 rider]

Tax threshold is locked until 2026 AFAIK.

Stealth tax!

Oh bugger shows what I know

 

[PaulSB]

I have a private pension but to date have only used drawdown to the tax threshold and have no plans to change that. I don't take an income. I'm familiar with the tax method as my wife has SP and NHS pensions and is taxed on a portion of the NHS pension.

I've no objection to paying but suggest this will become very costly for HMRC. I'll be £77 over the threshold. +/- £20 tax bill. How much will it cost to administer that?

 

[SpokeyDokey]

No, state benefits are not free of tax. They are counted as part of your total income, and if the total is more than your personal allowance, you will be taxed on anything above that.

If the state pension is your only income, you will have to fill in a self-assessment form and pay the tax resulting from that.

If you also have a private pension, they will deduct the relevant tax before paying you, and will include the state pension you receive in their calculations.

Not sure what happens if you have multiple private pensions.

Re multiple pension streams.

I'm in this boat and HMRC via Gov' Gateway a/c are quite amenable to requests to apportion your PTA as you want to different income streams.

No tax advantage on my part, just that I want 'x' amount going into 'y' bank a/c each month.

 

[SpokeyDokey]

I have a private pension but to date have only used drawdown to the tax threshold and have no plans to change that. I don't take an income. I'm familiar with the tax method as my wife has SP and NHS pensions and is taxed on a portion of the NHS pension.

I've no objection to paying but suggest this will become very costly for HMRC. I'll be £77 over the threshold. +/- £20 tax bill. How much will it cost to administer that?

Put that question to HMRC and see if they let you off.

Please let me know if it works.

Also, the total tax take with your drawdown & SP will be well over £77 surely?