Help for my mums pension / tax code?

DBrown1967

Hi all

My mum complained to me this week that her 2nd pension has reduced somewhat in this new tax year. She explained to me that she had a letter from HMRC that her tax code had changed. It changed from 150L to 52L.

The letter seemed to spell it out quite well. It showed her personal allowance (which from memory was around £12,560) then is showed "less pension of £12,040" leaving £520 allowance left over. These figures may not be exact, but that is the gist. Hence the new code of 52L.

But she is 83 years old. So she cannot be on the latest state pension. She must be on the old basic one, which is different I believe for men/women. I don't even know if she has the years in for the full amount. However, she has just received her first state payment in April, and this (x12) is nowhere near the figure used in HMRC code calculation. Should that figure used in the calculation be the figure she is receiving? Because otherwise the code is too low and she is paying too much tax on the 2nd pension.

It is all confusing to me (and even more to her) so sorry if any details are missing.

molerat

The old "basic" pension is lower than the new pension ...... but  ....... many are not on the "basic" pension but also receive additional pension, graduated pension and inherited "basic" and additional pensions which can total up to £387.90 per week - over £20K pa whereas those wholly on the new pension can only get £11.5K.  The first payment of the year is usually at the previous year rate and there are 13 x 4 weekly payments in a year. She would have received a letter at the end of the last tax year stating her new weekly pension amount and how it is made up, that would be a good place to start - multiply that by 52.

Dazed_and_C0nfused

You have a fundamental misunderstanding there.  

State Pension isn't paid monthly, it's 4 weekly (or weekly) so she would get 13 payments in the current tax year.

And the first State Pension payment in the current tax year will not be reflective of what she gets going forward.  

Her code should include 52 x the current weekly award or 51 x the current weekly award plus 1 week of the old rate.

flaneurs_lobster

State pension is paid 4-weekly so your calc should be x13. Also the April payment may not include the new rate for the whole month, the May payment will be the "whole" new amount.

Is the figure you've derived out of whack by a few quid or hundreds?

DBrown1967

Oh wow... thank you all. Yes I did have that basic misunderstanding. Not being a pensioner myself (yet). Using 13 payments now shows that from next month she only needs to get about £20 more to ensure the whole year reaches the total pension on that HMRC calculation letter. It now seems much more reasonable. As last year it raised after the April payment a similar amount. Of course we will keep an eye on it. 

Thank you all for your very quick replies.   <^.^>