Pension and Tax

Dan83

Hi,
My mum (70) is retired, her only income is her state pension.

She has recently, out of the blue got a letter from a pension provider (I won’t name them) telling her she has a pension that has been frozen for years with £2100+ in (I don’t remember the exact amount).

She has decided to cash it in for 2 reasons, 1) why has it been frozen, sat there for all these years not being reinvested and 2) if she decide to start claiming it, it wasn’t a lot of money.

She got 25% of her pension tax free, then paid tax on the rest (again, I don’t remember the numbers).

With her state pension being her only income, she doesn’t have enough income to pay income tax, can she claim the tax back that she has paid on her pension?

Thanks
Dan.

xylophone

With her state pension being her only income, she doesn’t have enough income to pay income tax,


She got 25% of her pension tax free, then paid tax on the rest (again, I don’t remember the numbers).

Hot all persons in receipt of just a state pension are non tax payers but some are.

 In your mother's case, If her state pension plus the 75% of the pension taken is under her personal allowance for the  tax year then she

 has overpaid tax.

She can reclaim on Form 53.

https://www.gov.uk/guidance/claim-a-tax-refund-when-youve-taken-a-small-pension-lump-sum-p53

 

Albermarle

If her state pension + 75% of £2100 = more than £12570 then she will owe some tax.
Even if she does the tax already taken could well be the wrong amount, so she will need to make a claim anyway.

Dazed_and_C0nfused

Or just wait for HMRC to automatically refund the overpaid tax.  No need for any forms.

https://www.gov.uk/tax-overpayments-and-underpayments

Dan83

Thanks for the replies. 

I will give her the good news and let her decide to either fill in the form or wait for them to contact her.