Tax on a private pension well below allowance

Cornholio_2

Hi folks,
I've retired at 55, mum has taken seriously ill and have assumed the responsibility of unpaid carer/ power of attorney etc. My pension will be pitiful but I've done the calculations and can live on these (one local authority, one civil service)pensions and my partner is ok with it... Nothing is very clear about tax though- I am not going to be doing any work (Glad to see the back of it tbh, had enough of being bossed around lol) so my only income will be from these two pensions and they are nowhere near the tax allowance of £12570. Will these pension administrators contact HMRC or vice versa? Hopefully they will sort this out asap as I don't want to be losing money that I clearly shouldn't be paying (I resigned 30/4/23 so only one months salary to date for this financial year) and then get told I'll get a rebate next April or something...can anyone advise what will happen? First one is due to be paid anytime now but the antiquated civil service seem to take forever and that may be closer to November/December....
Any advice appreciated, nobody seems to give any guidance on these things....

Dazed_and_C0nfused

It's likely that the pension payers will operate the emergency tax code (1257L) on the first payment so no tax would be deducted unless it exceeded £1,048 (assuming monthly payments).

Once the second pension is in payment and that has been reported to HMRC (by the pension payer) HMRC will review your tax code and should split your tax code allowances between the two pensions.

Having an employment earlier in the same tax year might slightly complicate matters but even if some tax is deducted and not refunded during the year there is absolutely nothing you need to do about it, it will be automatically refunded this time next year when HMRC review your tax for the 2023-24 tax year.

Nebulous2

Have you got a government gateway login? Your tax account will show you what is being reported to HMRC and what tax codes have been allocated. 

I've also found them responsive to a phonecall. I needed to tell them about pension contributions I was making and they adjusted my tax code very quickly. 

p00hsticks

Sorry to hear of the position you find yourself in. 
A couple of points not directly related to your original questions but I hope are useful for you to think about.
Have you looked into claiming carers allowance ?
Carer's Allowance: How it works - GOV.UK (www.gov.uk) 

If you get that, it comes with National Insurance credits.
If you aren't eligible for that or for something else that gives you credits, then you need to check your state pension entitlement here
Check your State Pension forecast - GOV.UK (www.gov.uk)  

It's possible that, at age 55 and a history of being in contracted out schemes, you are currently forecast to be short of the full amount (£203.85). It may be a stretch for you, but if you are able it would be a very good investment to continue to make Voluntary NI contributions to build up the amount further.

 If you can develop some sort of small self-employed sideline (e.g. dog walking ,selling things on e-bay, etsy etc) then you can pay at the much lower Class 2 rate.

LHW99

Also, has you mum claimed attendance allowance. Its not means tested, and payable at two levels, but there is a wait before it comes into payment even when approved (I seem to remember). It would not help you directly, but could mean mum could employ someone for a few hours a week to relieve you of some of the work (even if it were only cleaning / providing a hot meal / doing washing).

Albermarle

Nebulous2 said:

Have you got a government gateway login? Your tax account will show you what is being reported to HMRC and what tax codes have been allocated. 

I've also found them responsive to a phonecall. I needed to tell them about pension contributions I was making and they adjusted my tax code very quickly. 

Just to be clear for the OP.
As above you can see what code is allocated to what on your online personal tax account, but only once the pension is in payment.
You can not get ahead of the game by contacting HMRC before the pension is in payment.

Nebulous2

Albermarle said:

Nebulous2 said:

Have you got a government gateway login? Your tax account will show you what is being reported to HMRC and what tax codes have been allocated. 

I've also found them responsive to a phonecall. I needed to tell them about pension contributions I was making and they adjusted my tax code very quickly. 

Just to be clear for the OP.
As above you can see what code is allocated to what on your online personal tax account, but only once the pension is in payment.
You can not get ahead of the game by contacting HMRC before the pension is in payment.

It will tell you what information they have received, and how HMRC have reacted to it.

There is also an option, though I've never used it, to add an employer or pension which they are not aware of. 

Cornholio_2

Thanks for all your replies folks, seems I'll just have to wait until the dust settles and both pensions are being paid. I do have a Govt Gateway account and I fell over the proverbial finish line with my full 35 years NI contributions in April!!
Regarding additional carers allowances and benefits it gets so complicated I've already looked into that, and I kinda just want to claim what I'm due and have worked for and have as little as possible to do with the "system"... trying to figure out how to make the rest of my life as uncomplicated as possible. Hopefully will make it to 67 and my state pension (or will it be UBI by then lol) without working again, but it means that if I do have to fill that gap I can find a job with 1 or 2 days a week maximum so I'm not paying NI or tax.....

Dazed_and_C0nfused

I do have a Govt Gateway account and I fell over the proverbial finish line with my full 35 years NI contributions in April!!

35 years is only relevant to those starting to accrue NI years from 2016 onwards.

Have you read your forecast in detail?

Cornholio_2

Dazed_and_C0nfused said:

It's likely that the pension payers will operate the emergency tax code (1257L) on the first payment so no tax would be deducted unless it exceeded £1,048 (assuming monthly payments).

Once the second pension is in payment and that has been reported to HMRC (by the pension payer) HMRC will review your tax code and should split your tax code allowances between the two pensions.

Having an employment earlier in the same tax year might slightly complicate matters but even if some tax is deducted and not refunded during the year there is absolutely nothing you need to do about it, it will be automatically refunded this time next year when HMRC review your tax for the 2023-24 tax year.

This is the EXACT information I was seeking, puts my mind at ease, when you've worked out your "survival pension" last thing you need is someone skimming it.... (thankfully own our house outright so it's just bills and food, and I can turn my hand to anything if needs be and do all maintenance/repairs.....I may or may not one day inherit something from mum, her neurological decline is devastating and has been rapid, yet her physical health is perfect...started just a few weeks after her second "safe and effective"...hmmmm.....)

xylophone

I fell over the proverbial finish line with my full 35 years NI contributions in April!!

You were a member of two contracted out pension schemes so it is possible that you may not yet be entitled to full NSP.

What exactly does your state pension forecast show?  

Amount accrued at 5/4/23?

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