lump sum payout and yearly annuty aged 40

col2462

Ten years ago i was offered a lump sum of £10,000 and an annuity starting £58 and rising 5% each year. I was unemployed at the time. This all came to light because i was misold private pension. I have for the first time recieved a P60 from Friends Life and have discovered i have not been paying tax on this money should i be?, and i am sick with worry regarding this and i am now not sure that i should have got this deal after reading info on pensions and annuitys. I was 40 years old at the time and i will be 50 next month, can someone please HELP

dunstonh

What type of annuity is it?

Annuities do not have to be linked to pensions. The taxation method varies with different types of annuity as well.

col2462

It says pension annuity

col2462

It says on my first ever p60 from Friends life pension paid by us £1450 tax code NT SUCICIDAL WITH WORRY

jem16

col2462 wrote: »

It says on my first ever p60 from Friends life pension paid by us £1450 tax code NT SUCICIDAL WITH WORRY

NT tax code means that no tax would have been taken which probably fitted in with your circumstances at the time. If you have been working over these last 10 years you should have advised the pension company and HMRC of your change of circumstances and you would have been given a different code.

If you have been a basic rate taxpayer over the last 10 years you will owe 20% tax on each year.

I suggest you get in touch with HMRC immediately and tell them what has happened. You will owe tax but I'm sure they will get something sorted out with you. No need to be suicidal.

col2462

I am now thinking was it right for me to get this lump sum and the annuity at the time 10 years ago? I have contacted hmrc and they are going to investigate. Will i have to pay any money due as a lump sum

jem16

col2462 wrote: »

I am now thinking was it right for me to get this lump sum and the annuity at the time 10 years ago?

10 years ago the minimum age for a pension annuity was 50 so I'm not sure how yours got paid at 40.

I have contacted hmrc and they are going to investigate. Will i have to pay any money due as a lump sum

I think it depends on amount owed. Larger amounts should be offered a repayment plan.

col2462

That is my worry, was it legal for me to get this lump sum of money at 40 years old? If i say over the ten year period i have been paid £12,000 do i owe £2,400. Will i need to pay back the lump sum that i got also. I am suicidal because my financial situation is now a complete mess

jem16

col2462 wrote: »

That is my worry, was it legal for me to get this lump sum of money at 40 years old?

Who organised the annuity? You say it came about through being missold a private pension.

If i say over the ten year period i have been paid £12,000 do i owe £2,400. Will i need to pay back the lump sum that i got also. I am suicidal because my financial situation is now a complete mess

Without knowing how you got paid a pension annuity at age 40 that wouldn't normally be paid until age 50 it's impossible to say.

col2462

Friends provident at the time sent letters to ask if i thought i had been misold private pension filled in the paperwork and after months of not hearing anything was sent a letter with this offer

jem16

col2462 wrote: »

Friends provident at the time sent letters to ask if i thought i had been misold private pension filled in the paperwork and after months of not hearing anything was sent a letter with this offer

Have you asked Friends Provident how they were able to give you the annuity at age 40? They should be able to clarify it for you.