What can widowed MIL have now?

jem16

Cottage_Economy wrote: »

Is it usual for private pension providers to contact HMRC with the details or do we have to do that ourselves?

The pension provider will notify HMRC of a new pension payment but I would always advise contacting HMRC yourself to make sure.

What tax code is currently being used with the pension being paid from your FIL?

sleepless_saver

Cottage_Economy wrote: »

Hi all.
Thought I'd come back and update everyone on what looks to be the final outcome. I managed to persuade MIL to sit down with me and show me all of her financial paperwork. Although she had kept everything she'd ever been sent it was unsorted and the contents not understood by her.

Thank you for letting us know the outcome. It's good to know that she will have enough - and certainly more than seemed likely at first.

Cottage_Economy

jem16 wrote: »

The pension provider will notify HMRC of a new pension payment but I would always advise contacting HMRC yourself to make sure.

What tax code is currently being used with the pension being paid from your FIL?

Wrong as far as I remember when I saw it a couple of days ago. They've got her on 810L. I can't quite remember her tax coding from the most recent coding letter from HMRC but it started with a 4, so there is a disparity.

Cottage_Economy

kidmugsy wrote: »

About your late FIL's pension: sometime schemes pay full pension to the widow for three months after death, and then the pension falls to the widows' rate - often 50%. You might like to check that.

This is what I'm concerned about, but MIL claims that they never said it was for a set period of time therefore it must be the amount she's going to get for good. This is what worries me about my MIL. She assuming they would have mentioned it if that was so.

jem16

Cottage_Economy wrote: »

Wrong as far as I remember when I saw it a couple of days ago. They've got her on 810L. I can't quite remember her tax coding from the most recent coding letter from HMRC but it started with a 4, so there is a disparity.

It really should be BR as I am assuming her tax code will be applied to her own occupational pension (minus an allowance for her state pension).

You really need to get your MIL (with your help if necessary) to phone HMRC and get this changed as she will be building up an underpayment of tax.

jackyann

Thank you for letting us know, and I'm glad things are better than you feared.
I would definitely check what rate she is going to get long-term - are you able to have a look?
I think this reminds us all of how important financial education is. I do think as well that she is fortunate to have a family who are so concerned for her welfare.

xylophone

http://www.hmrc.gov.uk/rates/it.htm

I would strongly suggest that your mother in law (you with her permission) contact HMRC - she will now have her state pension, her husband's pension, her own occupational pension, other small pensions and savings income.

The amount of tax she will pay may not be very great but you would want it to be correct.

Cottage_Economy

Mother-in-law phoned last night to say she had more documentation from HMRC with figures on them she thinks are about FIL's pension, so I will go over at the weekend, check it over and then if there's anything to be done sort it out accordingly.


Also I checked some other paperwork that recently turned up from FIL's pension and it clearly states that they will pay her the pension for the rest of her life.

atush

Excellent news.

Cottage_Economy

Bit more of an update.

I've looked over the paperwork and can not make hide nor hair of what the tax office is playing at.

After carefully going back through all the paperwork it appears that

a) sometime in 2010 the tax office magicked an extra pension out of thin air that she does not receive. I know this because she was not sent any paperwork that year from the tax office, it wasn't on the paperwork for 2009 but is on the paperwork for 2011. There is nothing in her pensions paperwork, which she has kept since she retired, and no corresponding figure in her bank statements.

It didn't take her above the limit for tax, but is now being considered as part of her tax free allowance so it has to come off.

b) They've magicked another £450-odd a year onto this already dreamt up figure. No idea what this is and does not correspond to anything she receives or will part receive for the rest of the year.

c) FIL's pension appears to be absent from the calculations.

So, I have now written a letter asking them to:

a) investigate this erroneous additional income which has appeared
b) laid out all the income and from where that she was receiving prior to FIL's death
c) laid out the income and from where she will receive from now on.

As FIL died almost 26 weeks into the year it makes working out some of this a lot easier.

From that I've been able to give her an idea of how much tax she will be paying for the next five months, which isn't a huge amount - about £30 a month - and she knows that will rise in the next financial year.

But I must say, I am shocked at the brevity of the information provided by the tax office - not even the name of the pension provider next to each amount - and the complete absence of calculations.

No wonder so many people get confused.