Personal allce

Silverbird65

I just tell them the past years interest and they use it to estimate current year. I just get a but stressed getting the figures right I am scared they will think I am cheating them.

unholyangel

badmemory said:

I think one of the things we always have to remember here is that it is OUR responsibility to get our tax right, not HMRCs or DWPs.  

Unfortunately DWP do not seem to be able to tell HMRC the correct state pension figure, they get it right about 1 year in 4 due to the date of the first payment of the increased rate.  As for HMRCs figure for interest, so far nowhere near right & I only have interest from major banks!  I actually find it harder to check their figures than I did to file self assessment, but they won't let me do that anymore.

I might be misunderstanding your meaning, but a common mistake people make with tax & state pension is assuming they are taxed on the payments they actually receive in a year. State pension works on accrual rather than receipt. Although tbh, on receipt would just knock the income into a different year (either earlier or later), rather than remove it entirely from taxation. 

The bank interest...there are normally a lot of "teething" problems with policy change. I'd expect bank interest to settle down going forward as banks/people/hmrc get more used to dealing with it. Personally, I'd prefer it to go back to how it used to be done (deducted at source). 

molerat

unholyangel said:

badmemory said:

I think one of the things we always have to remember here is that it is OUR responsibility to get our tax right, not HMRCs or DWPs.  

Unfortunately DWP do not seem to be able to tell HMRC the correct state pension figure, they get it right about 1 year in 4 due to the date of the first payment of the increased rate.  As for HMRCs figure for interest, so far nowhere near right & I only have interest from major banks!  I actually find it harder to check their figures than I did to file self assessment, but they won't let me do that anymore.

I might be misunderstanding your meaning, but a common mistake people make with tax & state pension is assuming they are taxed on the payments they actually receive in a year. State pension works on accrual rather than receipt. Although tbh, on receipt would just knock the income into a different year (either earlier or later), rather than remove it entirely from taxation. 

The bank interest...there are normally a lot of "teething" problems with policy change. I'd expect bank interest to settle down going forward as banks/people/hmrc get more used to dealing with it. Personally, I'd prefer it to go back to how it used to be done (deducted at source). 

The first payment accrued at the new rate will be the first full week in the new FY which is not always the first pension week of the year.  My weeks commence on a Saturday so the first 2020 rate week commenced on 11th April and my first week in the 2020 FY was up to 10th April which was at the old rate.  HMRC have got 2 figures for me, for my tax code adjustment they have used 1 x old rate and 51 times new and for my income summary they have used 52 x new rate so who knows.

Silverbird65

They must be as confused as us. Are there any winners😆😄

polymaff

Rather like with NS&I, the attitude is that "well, it all balances out in the end!

Pathetic.

polymaff

Silverbird65 said:

They must be as confused as us. Are there any winners😆😄

Yes, you.  Recent income tax changes working in your favour - and is that the new State Pension?

Silverbird65

Yes the new SP but with deduction for contracted out years. Hence the other small pension to cover those times.

polymaff

So you really ARE one of the winners.  Contrast Mrs. P.'s position.  Despite 40 years of contributions her SP date was pushed back - but not quite enough to get the new SP.  If that wasn't bad enough, her teacher's pension plus her meagre old-style £5k7 SP wiped out the £5k tax relief on her savings - meaning that her SP is incrementally taxed at close to 40% - despite her being nowhere near being a higher rate tax payer.

Count your ****  blessings.

Silverbird65

Iam sorry to hear that I had to wait to 63half before I got my pension which was 4 yrs ago. Sometimes I think less is more i.e. should I bother saving for retirement?

polymaff

Silverbird65 said:

Iam sorry to hear that I had to wait to 63half before I got my pension which was 4 yrs ago. Sometimes I think less is more i.e. should I bother saving for retirement?

That was Mrs. P's thought and she decided to defer her old-style SP as the only good thing about the old-style SP was a more generous deferral revaluation scheme, which meant that she might eventually overtake the new SP's yield.

Within two years of deferral she developed a brain tumour.

Count your  ****  blessings.