Pension Lump Sum

iceboy_2

On December the 1st I was paid a lump sum pension of £8875 that's all the pot..both me and my wife are pensioners and the government state you should be able to live on £240 a week.Their website states if the lump sum is under £11000 hardly any tax would be paid if any at all of lump sum was paid..now this is where it gets sticky..because they say savings count towards the tax paid..I and my wife are state pension and nothing more..we had £1900 in the bank,but they count your pension as savings?. I had £13600 deducted from the £8875 is this right do you think?.

Silvertabby

I had £13600 deducted from the £8875 is this right do you think?.

I assume you mean £1,360 tax!

That does sound about right - for now - as your pension provider is unlikely to have had a pension coding to work with.

The first 25% of your £8875 was paid tax free, and you have paid 20% basic rate tax on the rest. Nothing to do with any savings you may already have had in the bank.

If you weren't liable for all or any of this tax, then HMRC will refund you at the year end. Or you can claim it now - the covering letter from your pension provider should give you the contact details and any reference to quote.

iceboy_2

Thank you so much for replying..and the info much appreciated.