Pension and tax

MrsPorridge

DH has been taking two small pensions for the last few years. He is still working. He has always been taxed on the two small pensions. He is now thinking of retiring (with 2 years to go till his normal retirement age). When he gives up work completely will he still be taxed on the two small pensions?

The two small pensions amount to £290 per month after tax.

JoeCrystal

Pension income are treated as taxable income so providing he earns less than the personal allowance, then he won't be taxed on them.

xylophone

The personal allowance for 2019-20 will be £12,500.

Will he have other income (savings/dividends etc)?

https://www.litrg.org.uk/tax-guides/other-tax-issues/savings-and-tax

Has he obtained a state pension statement?

https://www.gov.uk/check-state-pension

MrsPorridge

Thanks for the helpful replies. No he has not done his statement pension check yet - that will be this weekend.
Other savings would just be premium bonds - would that count?
No other income.

xylophone

Premium Bonds don't pay interest- all winnings are free from UK income tax and Capital Gains Tax.

Dazed_and_confused

When he gives up work completely will he still be taxed on the two small pensions?

The two small pensions amount to £290 per month after tax.

He may well be initially (and that could be correct in a tax year when he has been working as well) but in a tax year with only this pension income then no income tax would be due.

It may take a payment or two before HMRC sort out his tax codes but ultimately he will get any tax overpaid back.

MrsPorridge

Sorry one more question - would he have to let HMRC know that he has stopped working?

Dazed_and_confused

Not usually no. His employer should tell them when they make his final salary payment.

If you don't think any new tax codes relating to his pensions are correct you may need to contact them to sort that out and if you do need to it would be sensible to have worked out how much he expects to receive from each pension per tax year before contacting HMRC.

[Deleted User]

Hi,


if he stops working will he have enough NI contributions for a full state pension, or will he 'job seek' to get added contributions, or pay voluntary contributions, if needed.?

MrsPorridge

That was my next question He will be 2 years before he hits the Govt pension - so he does want to pay his NI contributions - how would he go ahead doing that?

Secondly, he doesn't have any savings - most are in my name - can he claim the job seekers? Or do my savings count as we are married?

xylophone

He will be 2 years before he hits the Govt pension - so he does want to pay his NI contributions -

What exactly does his new state pension statement say?

https://www.gov.uk/check-state-pension