Pension... Main Income...? Nat Ins...?

ITF1969

Hey, I'm due out of the HM Forces next friday and just got a couple of quick questions...?

I don't have a job yet, so my monthly pension will be my income for the moment.... Do I pay Nat Ins on the pension?

When I do start work again, what happens about my pension?

Do I start paying Nat Ins again on it?

I've heard your better off making your pension your main income... is this right?

How do new employers work out my tax and nat ins with my pension?

Cheers Ian

Alias_Omega

Ian,

I am not really a person that plugs websites, when you can get the information freely on the internet.

You sound like a person who needs help with the pension, and i can recommend these people.

http://www.forcespensionsociety.org/

I think the fee is £30 per year, which you can join for 1 year, and they will answer all of your questions free of charge. If you dont want to join, there is information on the website that you can use anyhow.

Regards,

Alias

RichandJ

You don't pay NI on any pension, regardless of source. It is taxable though.

If you get a job & it will be your main or higher income then your personal allowance (tax code) should be applied to that income. Basic rate tax will then be applied to your pension as your personal allowance can only be applied to one income stream paid through PAYE.

This should be taken care of by the personnel/payroll dept at any new employer, but obviously caveat emptor.

tocsin

Pensions are never subjected to National Insurance (unless a Government changes the rules :eek: ).

As to which one you choose to have tax allowances set against, it doesn't really matter - as long as your pension is large enough to fully utilise the allowance.

I retired a couple of years ago, and chose to have my allowance against the pension, as this was a permanent income, where part time off and on employment (my choice) was at BR (basic rate - no tax allowance). Watch out if HMRC try to give you a D0 tax coding - that means tax at 40%...