Help with what to do with my pension - Can I claim back tax?

atush

I thought you could transfer a sub 2 yr pension? Whey have they told you that you can't?

This would solve the tax problem.

Slovell3003

I seem to be getting different answers dependent on who I am talking to... I have requested the breakdown of deductions and stated what Jen said.

hyubh

Slovell3003 wrote: »

I seem to be getting different answers dependent on who I am talking to... I have requested the breakdown of deductions and stated what Jen said.

In general, things work like this:

- Total membership of less than three months: refund through payroll, and it's as if you were never in the scheme at all

- Total membership of between three months and two years: choice of either a refund through the scheme (employee contributions only, less tax and NI [if applicable]) or a transfer out (transfer value incorporates, in effect, employer + employer conts).

- Total membership of two years or more: deferred benefit with the scheme; right to transfer out to another public sector scheme

Sounds like the people at TP/Capita you've been speaking to haven't been clear on how long you were a member for.

kidmugsy

Who is your new job with? If it's "public sector" you could transfer using "club" terms.

Slovell3003

So I got a reply from TPS, basically they haven't answered any of my questions and I still cannot see how they can say I will only get 50-55% back!

Here is the email I got:

Dear Ms Lovell

Thank you for your recent correspondence.

Contributions are taken from gross at source, and therefore have not been subject to tax. Furthermore, as scheme membership is contracted out, members within the scheme pay a reduced Nation Insurance rate. Therefore, when the repayment is made both tax and National Insurance deductions are taken.

Members may claim the tax back on their repayment, only if they did not originally qualify to pay tax whilst in service. However, this must be done by contacting HMRC and your National Insurance Number), by one of the following methods:

(Deleted as not needed)

We do not record individual teacher's contributions as they are not used in the calculation of any retirement benefits that may become due. All we do record is the service and salary. Contributions are independently audited.

You can visit our website for further information about the Teachers' Pension Scheme.

I hope the above is of assistance.

:mad:

atush

They answered as if you WANT to get the cash back. But you want to transfer? Which is why your Q is not answered properly.

So start again saying you want to TRANSFER to another pension (have you decided where) and that you do not want your contributions back. AS for the CETV value

Slovell3003

I must admit that I am very confused now as every operative I speak to gives me a different answer. Been told by one person I can't transfer as I am not in the qualifying period of two years , another said I could but minus a 20% admin fee. My last email I asked for how much I would get for a direct transfer and how much I would get for a repayment and to explain why the deductions for a repayment do not add up to 31.6% as mentioned in an answer above....

Feel like I am going round in circles and they are deliberately trying to be evasive!

jem16

Slovell3003 wrote: »

Contributions are taken from gross at source, and therefore have not been subject to tax. Furthermore, as scheme membership is contracted out, members within the scheme pay a reduced Nation Insurance rate. Therefore, when the repayment is made both tax and National Insurance deductions are taken.

Which is what I said earlier. So 20% tax and 1.4% NI, total 31.4% for basic rate taxpayers. Higher rate taxpayers it would be 41.4%.

How that translates to 50-55% is anybody's guess. If you get any less then you should complain. If you do want to take a refund than email back and say that as tax is 20% and the NI reduction is 1.4% that does not add up to 50-55%.

However I would seriously consider emailing back and saying that you plan to transfer and ask for precise figures on that. Your problem may be the ban on DB transfers which are not to DB pensions.

Who is your new employer and what kind of pension scheme is it offering?

Slovell3003

I am now working in the private sector and have a pension which my new employer contributes to (I do not have to contribute but can if I wish) which is managed through a private firm.

I am trying to get this all in writing with TPS so I can look back and refer to as needed opposed to calling them. I just feel I don't understand this enough and they are running rings round me.

My preference is to transfer as has been previously pointed out I would get mine and the employer's contributions.

Back we go to the email....

Thank you for listening and helping me with this. Feel so out of my depth

jem16

Slovell3003 wrote: »

I am now working in the private sector and have a pension which my new employer contributes to (I do not have to contribute but can if I wish) which is managed through a private firm.

So likely to be a Defined Contribution pension?

I am trying to get this all in writing with TPS so I can look back and refer to as needed opposed to calling them. I just feel I don't understand this enough and they are running rings round me.

My preference is to transfer as has been previously pointed out I would get mine and the employer's contributions.

I would suggest that you write, as opposed to emailing, and point out that you have been given so much conflicting advice regarding transferring and refunds that you now feel you don't have enough accurate information to act on.

You should point out the actual tax and NI figures compared to the 50-55% that you keep being quoted and ask why the difference.

From the transfer point of view you should ask what the CETV ( Cash equivalent transfer value) is and what kind of pension you can transfer to given that you know transfers to non-Defined Benefit pensions have been banned since April 2015. Point out that you know a transfer is allowed as the scheme rules say so but once again you have been given two different answers.

Hopefully it should make its way to someone with more authority who actually knows the correct answers.