Help Cashed In Pension missing £300K

Kake

Please can someone explain.

I was contacted by my pension provider in 2020 asking if I wanted to cash in my pension pot approx £37K
Due to financial difficulties I took it.

The contact was out of the blue &related to a pension I had forgotten existed.  I have not received any regular communication regarding it.

Now I find HMRC have expected earnings for me 22/23 of approx £334K. & Tax due of £135K.
I contacted them & they confirmed it relates to pension provider.

Have I lost £300K

dunstonh

I was contacted by my pension provider in 2020 asking if I wanted to cash in my pension pot approx £37K

That is a very strange thing for a pension provider to do.   Certainly, they are targeted to contact people in the lead up to the scheme age and they are required to locate people who may not have told them a change of addresses.  But I have never come across a pension provider asking you id you want to cash in a pension fund.

That in itself is a warning of something not quite right...assuming that is exactly what they said.

Now I find HMRC have expected earnings for me 22/23 of approx £334K. & Tax due of £135K.
I contacted them & they confirmed it relates to pension provider.

Have I lost £300K

What does the paperwork say from the pension provider about how much the gross payment was, how much tax was deducted at source and the net amount received?  
What date did this happen?  (full withdrawal in 2020/21 tax year would have no impact on 22/23 and you would have overpaid the tax and expect some back. Not the other way around).

The reality here is that we dont have access to your paperwork and we cannot answer that question because of that.    You have access to the paperwork and you can tell us what it says and we can give you pointers based on that.

Marcon

Kake said:

Please can someone explain.

I was contacted by my pension provider in 2020 asking if I wanted to cash in my pension pot approx £37K
Due to financial difficulties I took it.

The contact was out of the blue &related to a pension I had forgotten existed.  I have not received any regular communication regarding it.

Now I find HMRC have expected earnings for me 22/23 of approx £334K. & Tax due of £135K.
I contacted them & they confirmed it relates to pension provider.

Have I lost £300K

Who contacted you and how did they get your details?

If your pot was only £37K, how could you have lost £300K?

Flugelhorn

Looks like HMRC thought you were going to get that payment every month

penners324

What does your online personal tax account say?

How have you lost £300k? Hmrc are making prediction based on the £37k being paid every month from now on 

Kake

my personal tax account says Expected earnings £334K  Tax £135K

I dont know that I have lost £300K thats why i need explanation. HMRC did not give
Thank you for your help

Kake

DunstonH

Thank you for your reply.

Pension company definitely contacted me. I was unaware the policy still existed.


What does the paperwork say from the pension provider about how much the gross payment was, how much tax was deducted at source and the net amount received?  
What date did this happen?  (full withdrawal in 2020/21 tax year would have no impact on 22/23 and you would have overpaid the tax and expect some back. Not the other way around).

Gross payment 20/21 was £37159.51  which I paid approx £10800 Tax for it in that year.

I turned 60 last year when I am guessing the policy would have matured, however I was not aware of that at the time I took the lump sum.


The reality here is that we dont have access to your paperwork and we cannot answer that question because of that.    You have access to the paperwork and you can tell us what it says and we can give you pointers based on that.

Marcon

Kake said:

my personal tax account says Expected earnings £334K  Tax £135K

I dont know that I have lost £300K thats why i need explanation. HMRC did not give
Thank you for your help

You can't have lost £300K when you never had it in the first place.

Go back to HMRC and point out it was a one-off encashment of a pension policy and your earnings are expected to be [whatever you expect to earn - roughly].

Flugelhorn

definitely sounds like some incorrect figures in the personal tax account

Kake

Thank You Marcon,

That makes me feel better, that I have not lost £300K

xylophone

Are you saying that you were contacted by a certain pension provider and advised that you had a pension  valued at £37,000?

You were over age 55 (assuming no protected pension age) at that time?

One of the options offered was to take the pension in cash, presumably 25% tax free and the balance taxable?

This would be £9.250 tax free and  £27,750 taxable.

You would have expected the pension provider to deduct tax before paying you.

Do you have a P60 from the pension provider?

See

https://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/

What was your total  gross taxable income for the year in which you received the pension payment?

And total tax paid that year?