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Early retirement at 59

Hi I have taken early retirement and am aged 59. I am not working or claiming any thing !
I am about to get my monthly pension and my annual pension which is below £8000 will I pay tax on this, do I have to contact the tax office to tell them I have retired.? Can I apply to my building society to not pay tax on my savings as not sure if I am now not a tax payer?
Thank you

Comments

  • dreaming
    dreaming Posts: 1,162 Forumite
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    ooh congratulations. I too have just retired (at 58) and one of the first things I did was to notify HMRC. I will still pay tax this year as I worked until the end of August. The lady at HMRC (once I got through) was extremely helpful.
    I didn't think about building society tax (and I used to work for one - oops) but I'm sure someone will be along soon who will know.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    As long as your taxable income is below your annual allowance, which is £9440 for this tax year, you won't have to pay tax on pension income or interest.

    If your interest will take you above this, then you might prefer to pay the tax and then claim it back later rather than having to report the underpayment. Your choice.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • jem16
    jem16 Posts: 19,494 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    mumburt wrote: »
    Hi I have taken early retirement and am aged 59. I am not working or claiming any thing !
    I am about to get my monthly pension and my annual pension which is below £8000 will I pay tax on this, do I have to contact the tax office to tell them I have retired.?

    As you have just retired I am assuming you have just finished work? If so it's your total income over the tax year that will count so you would need to add your salary earned so far to your pension to get a total. If it's over £9440 then you are still a taxpayer for this year.

    What you should do is give your P45 from your work to your pension provider. They will then use those details to tax you correctly.

    From next tax year, you may well be a non-taxpayer but your tax code will be attached to your pension and will take tax (or not as the case may be) accordingly.

    If you do this there should be no need to inform HMRC.
    Can I apply to my building society to not pay tax on my savings as not sure if I am now not a tax payer?
    Thank you

    As I said you may still be a taxpayer for this tax year if your total income from work and pension come to more than £9440. From next tax year you could complete a P85 to receive gross interest.
  • Thanks every one I think I will wait and see what drops through my leyptter box !
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    But you might be entitled to the 10% rate -see http://www.hmrc.gov.uk/taxon/ten-percent.htm
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