Private pension cut

oot

My wife who was made redundant in December began her state pension in February, she gets £160 per week.

She also has a pension from her old company that paid £185 per month until March when it dropped to £135, there was no notification why. They also said next month it will decrease to £93.58? That is a massive chunk.

Quite why they dropped the pension on March 30 is a mystery?

We phoned them today to be told it was taking account of the new tax regime introduced in the budget. we then phoned the tax office number they gave us who confirmed they were correct and that she was given a code of K419, previously 216L which replaced 747L.

We are writing to the private pension company to provide a detailed breakdown of this but it looks as if something has gone wrong.

The tax office said that they are inundated with people in the same position and when I tried to register for SA we were rejected.

Any advice /opinions will be appreciated thanks.

mgdavid

The pension is coming from the company she left last December, or some other previous employer?
Do I take it she had no income at all between December and February?
I presume the pension payment amounts you quote are net of tax?
Does she get a monthly payslip with the company pension payment?
If so then this will reveal what's being deducted and should show the tax code used.

jem16

oot wrote: »

My wife who was made redundant in December began her state pension in February, she gets £160 per week.

She also has a pension from her old company that paid £185 per month until March when it dropped to £135, there was no notification why. They also said next month it will decrease to £93.58? That is a massive chunk.

Quite why they dropped the pension on March 30 is a mystery?

The state pension is paid gross but is taxable. Now that your wife is receiving her state pension plus a company pension, any tax due from the state pension is being taken via the company pension.They do this by reducing the tax code by the amount of the state pension.

We phoned them today to be told it was taking account of the new tax regime introduced in the budget. we then phoned the tax office number they gave us who confirmed they were correct and that she was given a code of K419, previously 216L which replaced 747L.

Your wife is likely to end up with a K code as the state pension is higher than the personal allowance.

We are writing to the private pension company to provide a detailed breakdown of this but it looks as if something has gone wrong.

What do you feel has gone wrong?

The tax office said that they are inundated with people in the same position and when I tried to register for SA we were rejected.

No need for SA. A simple adjustment to the tax code will suffice.

This year's tax code ( assuming under 65 ) will be £8105 minus £8320 ( your wife's state pension) which leaves minus£215 which would equate to a tax code of K21.

oot

Thanks jem16 and mgdavid. What we feel has gone wrong is that no one thought to explain what the reason was for the deduction.

It still seems an awful chunk of money, from a relatively modest pension.

The private pension is from her last company and no she has had no income other than redundancy moneys, and pension lump sum.

The private company do not seem to bother with such niceties as statements.

I have e-mailed them anyway. the tax office said they are inundated with queries on this as lots of people are in the same boat.

thanks.

jem16

oot wrote: »

Thanks jem16 and mgdavid. What we feel has gone wrong is that no one thought to explain what the reason was for the deduction.

As it sounds like a tax issue, it's technically HMRC that should be informing you.

Has your wife completed a P161 form for HMRC?

Has she received a P2 Coding Notice to explain the change in tax codes? If she has what does it say?

It still seems an awful chunk of money, from a relatively modest pension.

Can you give us gross figures for the company pension?

What tax code was used in March? Perhaps if you post all the figures from the March payslip we could help make sense of it?

The private pension is from her last company and no she has had no income other than redundancy moneys, and pension lump sum.

The private company do not seem to bother with such niceties as statements.

Do you mean payslips?

I have e-mailed them anyway. the tax office said they are inundated with queries on this as lots of people are in the same boat.

thanks.

Emailing the pension company won't reveal much. They will have been told by HMRC to use a particular tax code - they won't know why. Only HMRC will know that.

xylophone

Has your wife had a 2012-2013 Notice of Coding from HMRC?
Does she owe tax from previous years?
Has she received untaxed income from savings?
Does she/has she received benefits in kind?
Was any tax due on the redundancy payment?

Batchy

Did she receive income support/job seekers etc before she received was entitled to state pension.

Did she have a company car before she retired/ timing difference on the benefits in kind could hurt you for a year! :-(

McKneff

She should be getting her P60 from her penson company any day now.

Mine came this morning.

Butterfly_Brain

That's the Tory Granny tax. Nice of them eh?

atush

rubbish..................................

opinions4u

Butterfly_Brain wrote: »

That's the Tory Granny tax. Nice of them eh?

Uninformed gibberish.