Pension lump sums

Gramski

Thanks for that. As well as my state pension, I have 2 private pensions coming up. After taking a 25% lump sum from both private pensions, I figure my income will be around £19000pa. So, 11850 from 19000 giving 7150 taxed at 20%. Correct?

Dazed_and_confused

Providing you don't either live in Scotland or have applied for Marriage Allowance then that looks correct. For the current tax year.

Watch out for the budget later this month for next year's Personal Allowance and tax rates.

And the Welsh budget if you are Welsh resident for tax purposes.

Albermarle

Normally HMRC will allocate your personal allowance to the largest income stream, and just take a straight 20% off the rest .I do not think this is mandatory but it is the default position and administratively the simplest one.
If the main income stream is below £11850 then the allowance will have to be split between two or more.

mgdavid

kidmugsy wrote: »

And yet they are wrong. Unless you can think of a UK tax that, like NICS, buys you a specific "benefit" from the Treasury - equivalent, in other words, to the State Retirement Pension.

Wrong only if you make up the rules. Nowhere is it written in statute or law AFAIK that a tax cannot 'buy' you a specific benefit. And of course NI only does this if you avail yourself of the individual benefits, for instance by getting sick (for the NHS part) or not getting sick and living long enough (for the SP part).

kidmugsy

mgdavid wrote: »

Wrong only if you make up the rules. Nowhere is it written in statute or law AFAIK that a tax cannot 'buy' you a specific benefit. And of course NI only does this if you avail yourself of the individual benefits, for instance by getting sick (for the NHS part) or not getting sick and living long enough (for the SP part).

It is a mere fiction that NICs pay so that you can use the NHS: the NHS will treat you whether you have paid NICs or not.

But to get a State Retirement Pension you do have to pay NICs: that is made even clearer with the move from the old-style SRP to the new.

Now then; what is your example of a tax that buys you a benefit in the way that NICs buy you an SRP?

Dazed_and_confused

The closest I can think of is the High Income Child Benefit Charge, seen as a tax in all but name and in a back to front way paying it means you get to keep the Child Benefit

mgdavid

kidmugsy wrote: »

It is a mere fiction that NICs pay so that you can use the NHS: the NHS will treat you whether you have paid NICs or not.

But to get a State Retirement Pension you do have to pay NICs: that is made even clearer with the move from the old-style SRP to the new.

Now then; what is your example of a tax that buys you a benefit in the way that NICs buy you an SRP?

Yes we agree all that.

My point is that NICs are a tax, and nothing I've read negates that.

Pennywise

And you dont actually need to pay any nic to get nic credits and the resultant state benefits. It's just another tax in reality.