20900 threshold for pensioners

eleraig

I have just found out I owe over 700 pounds in tax . I think this is because my income of teacher pension, AVP, and state pension is marginally above the threshold. My state pension includes allowance for my wife who does not use her own personal allowance. Can I do anything to save tax next year?

dunstonh

Can I do anything to save tax next year?

Reduce the amount of savings you have on taxable accounts and investments.

Use both of your ISA £7k ISA allowances in full. If you have larger investments, then consider using an Investment Bond instead of unit trusts. Also look at NS&I Index linked certs/fixed interest savings certs.

The age allowance figure goes up each year as well as the personal allowance. Although state pension and occ pension will do the same as well. So you may find the increases cancel out allowance adjustments and this is a situation you face every year. However, utilising tax efficient savings and investments and using your wife's allowance as well should help.

EdInvestor

eleraig wrote: »

My state pension includes allowance for my wife who does not use her own personal allowance.

It shouldn't do. Even if it is based on your contributions your wife's state pension should be sent to her in her own name, and is probably covered by her personal allowance. Yours will be separate.

If all your income is pension income, none is savings, then unfortunately you're stuck.

eleraig

EdInvestor wrote: »

It shouldn't do. Even if it is based on your contributions your wife's state pension should be sent to her in her own name, and is probably covered by her personal allowance. Yours will be separate.

If all your income is pension income, none is savings, then unfortunately you're stuck.

I´m stuck!
My wife does not have a pension in her own right as she is under 60 but I get an allowance for her as a dependant. I wondered if this could be paid directly to her.
Many thanks.

eleraig

dunstonh wrote: »

Reduce the amount of savings you have on taxable accounts and investments.

Use both of your ISA £7k ISA allowances in full. If you have larger investments, then consider using an Investment Bond instead of unit trusts. Also look at NS&I Index linked certs/fixed interest savings certs.

The age allowance figure goes up each year as well as the personal allowance. Although state pension and occ pension will do the same as well. So you may find the increases cancel out allowance adjustments and this is a situation you face every year. However, utilising tax efficient savings and investments and using your wife's allowance as well should help.

Many thanks for your advice. I don´t have any savings but will watch out when I do.

EdInvestor

eleraig wrote: »

My wife does not have a pension in her own right as she is under 60 but I get an allowance for her as a dependant. I wondered if this could be paid directly to her.
Many thanks.

Can you give more details of this allowance?

jennifernil

My husband is 65, I am 58, not working. He receives an extra amount in his pension for me. When I am 60 it will be paid directly to me as it is more than any pension I am entitled to based on my own NI contributions.

I think this is possibly the same situation as the OP is in.