Deferred Pension and compensation

xylophone

Just hoping I don't die before claiming as I ..or my family..would lose the lot. 

See

https://assets.publishing.service.gov.uk/media/5a7fa37eed915d74e33f7a7b/state-pension-deferral-if-you-reached-state-pension-age-before-6-april-2016-and-you-die-extra-information.pdf

Bettie

xylophone said:

Just hoping I don't die before claiming as I ..or my family..would lose the lot. 

See

https://assets.publishing.service.gov.uk/media/5a7fa37eed915d74e33f7a7b/state-pension-deferral-if-you-reached-state-pension-age-before-6-april-2016-and-you-die-extra-information.pdf

xylophone said:

Just hoping I don't die before claiming as I ..or my family..would lose the lot. 

See

https://assets.publishing.service.gov.uk/media/5a7fa37eed915d74e33f7a7b/state-pension-deferral-if-you-reached-state-pension-age-before-6-april-2016-and-you-die-extra-information.pdf

Thanks. Maybe I should get a husband.  

coyrls

Place a bet that Waspi women will get compensation before April 2025, such that your winnings would pay your tax bill.  You should get good odds.

Bettie

coyrls said:

Place a bet that Waspi women will get compensation before April 2025, such that your winnings would pay your tax bill.  You should get good odds.

I actually work in a bookies 

eastcorkram

Bettie said:

coyrls said:

Place a bet that Waspi women will get compensation before April 2025, such that your winnings would pay your tax bill.  You should get good odds.

I actually work in a bookies 

Great username.

Marcon

Bettie said:

Marcon said:

Bettie said:

My deferred pension lump sum will be about 90000. My question is will compensation affect the tax position. I read this week the Waspi stuff will be reviewed in December 2024. The last thing I want is compensation in that tax year if it affects a deferred pension 

Delay taking your deferred state pension until the end of March 2025 if you're worried (or optimistic, depending on your viewpoint!).

ColdIron said:

Bettie said:

You pay tax on the full amount if you go into the 20% tax band 
The lump sum will be 90000 ish

No you don't and where did this lump sum come from?

You only pay tax on the pension sums that exceed the £12,570 Personal Allowance and then you have couple of 0% tax bands (the £5,000 Starting Rate for Savings and the £1,000 Personal Savings Allowance) to protect your savings interest

With pension and savings within these bands you may pay no tax whatsoever. If you exceed one or both you only pay tax on the part(s) that exceed those threshold(s) not the 'full amount'

OP is correct. The tax treatment of deferred state pension (for those who deferred at a time when taking it as a lump sum was still an option) is in its own little world. See https://www.litrg.org.uk/pensions/state-pension/tax-state-pension/tax-deferred-state-pension-lump-sums#:~:text=The%20deferred%20state%20pension%20lump,to%20tax%20the%20lump%20sum.

I think delaying until after any Waspi news  is a good idea. I can always take the lump sum the following tax year. Would have to get the maths right though as I may have too much interest on savings that year with a state pension coming in as well. 

If you start your state pension in the last week of the tax year, you'll only need to count one week's state pension.

SheppeyMan

I deferred my new State Pension for 5 years. I have just claimed but am told by DWP I can only claim  for one year. Bit of confused, I calculated that'mypension should increase by about £60 but I am not sure now. Can anyone advise?

Marcon

SheppeyMan said:

I deferred my new State Pension for 5 years. I have just claimed but am told by DWP I can only claim  for one year. Bit of confused, I calculated that'mypension should increase by about £60 but I am not sure now. Can anyone advise?

Once you apply for your state pension to be put into payment, you can ask for the payment to be backdated for no more than one year.

See https://www.gov.uk/deferring-state-pension which gives details of the increases you'll get by deferring.

molerat

SheppeyMan said:

I deferred my new State Pension for 5 years. I have just claimed but am told by DWP I can only claim  for one year. Bit of confused, I calculated that'mypension should increase by about £60 but I am not sure now. Can anyone advise?

As a post 2016 retiree you can backdate the pension commencement 12 months and get that as a lump sum. There is no lump sum option as there was with the old pension, only an increase in pension.

Bettie

A catch up if anyone is reading. I claimed my pension the week before Christmas. It was processed straight away and I had note of the amount of lump sum within days. It was more than I expected as I had more serps than I thought.  I then had to claim it by phoning them and also state how much tax I would pay which was 0% There was no real breakdown of the lump sum so I can't work out if it's correct. Also I was silly to claim the week before Christmas as it took 3 weeks to receive the lump sum and I lost 3 weeks of interest - over £100 a week I think. I noted that if you opt to receive the lump sum the following year no interest is paid however I can't see anything about revising the lump sum amount between the time you claim and the time it hits the bank account.