Government Tax my Sister In laws pension

Ladywriter1968

My Sister In law recently retired, she has worked for 45 years. She gets a works pension and the state pension. This is what happened she told me.

She is not getting a full state pension! Yet has worked 45years?
I read that as long as you have paid 30yrs you are covered?

She said they combined her private pension with her state pension!
Which means she now has to pay tax on it?
Because I assume the amount she gets a month comes over the yearly barrier for tax relief?

They are stopping her £53pm tax, yet she has paid tax all her life since her leaving school and working right up to retirement.

Do you think this is fair? Surely pension people should get tax relief if paid into it all their lives?

Plus I think she is being conned out of her full state pension to?

Maybe some one here who knows a lot about this subject can advise me and I will pass it on to her.

Cheers

dzug1

Well she probably IS getting a full state basic pension

What she probably isn't getting is the second state pension. She/her employer will have decided at some time in the past that it wasn't worth paying for two pensions and therefore her works pension replaces the second state pension. She will have paid reduced NI and received tax relief on her works pension contributions..

And yes, state pension is taxable

Andy_L

She has worked 45 years, did she pay the full NI "stamp" for those 45 years or the reduced married womans rate? If the latter then she may well not be entitled to the full state pension.

You receive tax relief on the money paid into a pension, the quid pro quo is that you pay tax on the money comeing out of it.

CLAPTON

best to get thet facts

how much is her state pension
how much is the work pension

what is her taxcode for the work pension
how old is she
when did the state pension start?

amersall

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnBenefitsPensionsAndMaintenance/DG_172143
Does this help?.
This has always been the case. My dad died in 1970 and my mum recieved widowed mothers allowance, when she got a job, they added the wage to her widowed mothers allowance and she was taxed on the whole amount. When she went from widowed mothers allowance (as we were past the age for her to get this) , she got widows pension (think this was to do with my dads earnings, but not too sure) and this was added to her wage and taxed as well, as did the state pension when she was eligible as she was still working. So my mum paid tax all of the time from 1970 to 2008.I think this is unfair, as when you have paid tax all your working life, then you shouldnt be taxed on the state pension as you have worked towards being eligible for this.

molerat

Yep, Fred Goodwin should not be taxed on his state pension either !!

McKneff

If your income exceeds £6475 in any financial year, you pay tax (under 65) on the excess, your age and the amount of tax you paid throughout your lifetime doesnt come into it.
Alllowances starting April 11 will be £7475 so the same rule applies.

It is fair, because it applies to everybody.

RichandJ

Good job bendix is on holiday.

I find it utterly astonishing that someone with 400+ posts on these forums who obviously has Internet access cannot do a simple google search for HMRC or the DWP to find out the facts rather than venting such ill informed drivel about tax. I really do.

bilbo51

RichandJ wrote: »

I find it utterly astonishing that someone with 400+ posts ... such ill informed drivel...

You've clearly not seen the posts... :silenced:

McKneff

It amazes me how many people in the british Isles do not know even the basics of taxation.

If someone is taking hundreds of £s off my salary every month, I want to know the reason why it is the amount it
is and how they worked it out. It's really not rocket science. It also amazes me how many people get their wage slips,
P60s etc and just chuck them in the bin.

Mikeyorks

McKneff wrote: »

If someone is taking hundreds of £s off my salary every month, I want to know the reason why it is the amount it
is and how they worked it out. It's really not rocket science. It also amazes me how many people get their wage slips,
P60s etc and just chuck them in the bin.

You've been reading my thoughts (and posts).

Overall, tax is excruciatingly complex ..... but not at the level of the average individual. Where checking your Coding Notice and making sure the employer is operating it - is as tough as it gets.