Getting tax sorted after retirement

iansmum

My OH has just taken early retirement from local government and we are currently waiting for his pension forecast which has been slightly delayed as he also has an AVC and they are waiting for that info. We are expecting lump sum amounts from both plus the pension and possible a small annuity from the AVC. We know we can have an amount in a lump sum tax free and would assume we are given our options to choose from when the forecast comes in. Hubby also has an armed forces pension and has also applied for carers allowance for looking after his dad. My question is how is the right tax sorted out from all these things? Will the pension forecast have that info and when do we advise the army pension people? We don’t know is we should be doing something now! Thanks.

molerat

You don't speak to the Army pension, you contact HMRC and they will sort the correct tax codes.

iansmum

molerat wrote: »

You don't speak to the Army pension, you contact HMRC and they will sort the correct tax codes.

Thank you. I appreciate your help. :beer:

xylophone

Is your husband in receipt of his army pension?

My OH has just taken early retirement from local government and we are currently waiting for his pension forecast which has been slightly delayed as he also has an AVC and they are waiting for that info. We are expecting lump sum amounts from both plus the pension and possible a small annuity from the AVC.

https://www.lgpsmember.org/more/AVCoptions.php

Above may be worth a look but Silvertabby is expert on LGPS and she and her spouse both have armed forces pensions.

https://forums.moneysavingexpert.com/member.php?u=2533069

https://www.carersuk.org/help-and-advice/financial-support/help-with-benefits/carers-allowance?gclid=EAIaIQobChMInKC7iMO54QIVzb_tCh1OqQqJEAAYASAAEgIcq_D_BwE

Have you both obtained state pension forecasts?

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

iansmum

xylophone wrote: »

Is your husband in receipt of his army pension?



https://www.lgpsmember.org/more/AVCoptions.php

Above may be worth a look but Silvertabby is expert on LGPS and she and her spouse both have armed forces pensions.

https://forums.moneysavingexpert.com/member.php?u=2533069

https://www.carersuk.org/help-and-advice/financial-support/help-with-benefits/carers-allowance?gclid=EAIaIQobChMInKC7iMO54QIVzb_tCh1OqQqJEAAYASAAEgIcq_D_BwE

Have you both obtained state pension forecasts?

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

He has been receiving his army pension for 22 years now. We have state pension forecasts but have four years to wait for that. We just weren’t sure who to go to and how to make sure the tax was right.

xylophone

We just weren’t sure who to go to and how to make sure the tax was right.

Your husband has been receiving a pension and a salary so HMRC will be aware of his affairs!

They may well issue an amended code to LGPS after the first pension payment.

Re Carers' Allowance, link in previous may be of interest.

You could both check out your Personal Tax Accounts.

https://www.gov.uk/personal-tax-account

iansmum

xylophone wrote: »

Your husband has been receiving a pension and a salary so HMRC will be aware of his affairs!

They may well issue an amended code to LGPS after the first pension payment.

Re Carers' Allowance, link in previous may be of interest.

You could both check out your Personal Tax Accounts.

https://www.gov.uk/personal-tax-account

And thank you for the very useful,links. Much appreciated. :beer:

Silvertabby

I'm assuming that carer's allowance is paid in the same way as the State pension, with any tax due being taken from another income source.

In our cases, we had our income tax allowances applied to our Armed Forces pensions, and paid BR (basic rate) on our LGPS/CS pensions. When Mr S started to draw his State pension, his allowance was reduced in order to pay the tax due on his State pension from his RAF pension.

You will need to speak to HMRC to fine tune the details - but I would expect that if your husband's Army pension is more than £12,500 then his personal allowance will be applied to that, with a reduction in the code in line with the amount of his carer's allowance. His LGPS pension will then be taxed at BR. Bear in mind that it may take a month or so for things to settle down, so you'll need to keep an eye on his tax to ensure that it is correct.

Hopefully, my own case was a one-off - but when I retired from the LGPS and asked HMRC to switch my tax allowance to my RAF pension, I received a letter from them stating that they had carried out a review of my tax and that I owed them just over £2k, which they would recover by reducing by tax allowance code. Er, no I didn't owe them £2K. Fortunately, I spoke to a sensible lady who confirmed that I only owed just over £2. She didn't actually admit that someone had put a decimal point in the wrong place, but...

iansmum

Silvertabby wrote: »

I'm assuming that carer's allowance is paid in the same way as the State pension, with any tax due being taken from another income source.

In our cases, we had our income tax allowances applied to our Armed Forces pensions, and paid BR (basic rate) on our LGPS/CS pensions. When Mr S started to draw his State pension, his allowance was reduced in order to pay the tax due on his State pension from his RAF pension.

You will need to speak to HMRC to fine tune the details - but I would expect that if your husband's Army pension is more than £12,500 then his personal allowance will be applied to that, with a reduction in the code in line with the amount of his carer's allowance. His LGPS pension will then be taxed at BR. Bear in mind that it may take a month or so for things to settle down, so you'll need to keep an eye on his tax to ensure that it is correct.

Hopefully, my own case was a one-off - but when I retired from the LGPS and asked HMRC to switch my tax allowance to my RAF pension, I received a letter from them stating that they had carried out a review of my tax and that I owed them just over £2k, which they would recover by reducing by tax allowance code. Er, no I didn't owe them £2K. Fortunately, I spoke to a sensible lady who confirmed that I only owed just over £2. She didn't actually admit that someone had put a decimal point in the wrong place, but...

Thank you. Very useful advice. :T

iansmum

I have tagged this on to a previous post as it’s easier than explaining again so hope that’s ok.
It’s now 9 weeks since hubby retired. We found out whilst querying something else with the pensions department that we should have requested a forecast separately of his deferred pension as it was split in 2012 and a new one started with LGPS. We did this on May 3rd over the phone. We have just received this forecast today. We also had his forecast of the ‘active’ pension and the AVC forecast included in this. We sent back the retirement declaration form for that one saying we wanted to take the maximum amount lump sum and a slightly smaller pension. We had an email in early May saying there may be a slight delay in achieving this as they needed to contact the Pru for the AVC final figures etc. Then we had a letter on the 20th May saying this person had just been informed of his retirement and there would be a slight delay etc etc. Two ‘pay days’ have come and gone and still nothing is finalised. Now the letter from them about the deferred pension wants all,the same info as we sent previously and mentions the AVC! Why can’t all this be joined up? It’s the same department and the same phone number. What will happen now? We are getting so confused about the whole thing as we still don’t know whether we need to do anything or just leave it all to them to inform the relevant people. And hubbys carers allowance came through at the full rate so no tax taken off there either. Is this sort of delay to be expected and is this the normal way they work? Just as well we have some money to fall back on and can pay the bills, heaven knows what happens to those folk who don’t have this cushion. Any comments would be welcome. Thanks.

xylophone

It seems likely that the Carer's Allowance is paid without tax deducted (like State Pension) but because it is a taxable benefit, must be reported to HMRC so that any tax due can be taken from one or other of your husband's occupational pensions.

Are you saying that your husband has two LGPS pensions that should now be in payment (as well as an annuity from the AVCs) but aren't because the Pension Administrator has not yet completed the calculations?