Partial Retirement Tax

QrizB

Dazed_and_C0nfused said:

Sootyandspark said:

Dazed_and_C0nfused said:

Sootyandspark said:

@Dazed_and_C0nfused thanks for the replies so far and one final question - if first month’s pension (tax code 1257L) was £1276.69. Second month pension is £800.49 tax code D0 - will I ever get £1200 pension in future or was that just a one off. Is it possible to forecast? 

Presumably your pension increased to £1,334 for the second payment?

If so then whilst you are earning ober £60k at your employments then you will continue to pay 40% tax on your pension, getting £800/month after tax.

That is only going to change when you stop work or reduce your hours further so you aren't paying higher rate tax at your job.

Gross has been £1333.69 both months. I assume I just didn’t pay enough tax last month so this balances it out. Last month’s tax was £57 - which now thinking about it, was low. I assume the pension will level out in the coming months and be different in the new financial year as the reduced salary and pension together won’t be pro-rata? 

Nothing more is likely to change re your pension now.

How much do you expect your P60 in April 2027 to show for your job?  If that is >£50,270 then I wouldn't expect the tax code for your pension to change next year either.

But am a bit confused why you put this in your original post 🤔

first month’s pension (tax code 1257L) was £1276.69

From OPs posts:

- Gross £1333.69 both months (and ongoing)

- Net first month £1276.69, tax £57.00

- Net second month £800.49 (so tax was £533.20)

The oddest thing I can see about that is that 60% of £1333.69 is £800.21 not £800.49!

Sootyandspark

Dazed_and_C0nfused said:

Sootyandspark said:

Dazed_and_C0nfused said:

Sootyandspark said:

@Dazed_and_C0nfused thanks for the replies so far and one final question - if first month’s pension (tax code 1257L) was £1276.69. Second month pension is £800.49 tax code D0 - will I ever get £1200 pension in future or was that just a one off. Is it possible to forecast? 

Presumably your pension increased to £1,334 for the second payment?

If so then whilst you are earning ober £60k at your employments then you will continue to pay 40% tax on your pension, getting £800/month after tax.

That is only going to change when you stop work or reduce your hours further so you aren't paying higher rate tax at your job.

Gross has been £1333.69 both months. I assume I just didn’t pay enough tax last month so this balances it out. Last month’s tax was £57 - which now thinking about it, was low. I assume the pension will level out in the coming months and be different in the new financial year as the reduced salary and pension together won’t be pro-rata? 

Nothing more is likely to change re your pension now.

How much do you expect your P60 in April 2027 to show for your job?  If that is >£50,270 then I wouldn't expect the tax code for your pension to change next year either.

But am a bit confused why you put this in your original post 🤔

first month’s pension (tax code 1257L) was £1276.69

At the end of the financial year 2024/25 should show the pension as £19k and salary as £63k. 

Sorry for any confusion - my tax code on my pension payslip was 1257L for the first month therefore I only paid £57 tax on a gross of £1333.69. This gross amount has not changed in this second month, only the tax code has to D0. 

Does that make sense? 

Dazed_and_C0nfused

Sootyandspark said:

Dazed_and_C0nfused said:

Sootyandspark said:

Dazed_and_C0nfused said:

Sootyandspark said:

@Dazed_and_C0nfused thanks for the replies so far and one final question - if first month’s pension (tax code 1257L) was £1276.69. Second month pension is £800.49 tax code D0 - will I ever get £1200 pension in future or was that just a one off. Is it possible to forecast? 

Presumably your pension increased to £1,334 for the second payment?

If so then whilst you are earning ober £60k at your employments then you will continue to pay 40% tax on your pension, getting £800/month after tax.

That is only going to change when you stop work or reduce your hours further so you aren't paying higher rate tax at your job.

Gross has been £1333.69 both months. I assume I just didn’t pay enough tax last month so this balances it out. Last month’s tax was £57 - which now thinking about it, was low. I assume the pension will level out in the coming months and be different in the new financial year as the reduced salary and pension together won’t be pro-rata? 

Nothing more is likely to change re your pension now.

How much do you expect your P60 in April 2027 to show for your job?  If that is >£50,270 then I wouldn't expect the tax code for your pension to change next year either.

But am a bit confused why you put this in your original post 🤔

first month’s pension (tax code 1257L) was £1276.69

At the end of the financial year 2024/25 should show the pension as £19k and salary as £63k. 

Sorry for any confusion - my tax code on my pension payslip was 1257L for the first month therefore I only paid £57 tax on a gross of £1333.69. This gross amount has not changed in this second month, only the tax code has to D0. 

Does that make sense? 

Yeah, does now 😀.

Not quite sure where 2024/25 fits into things, it was the year to 5 April 2027 where it might change.  Depending on your expected (taxable) earnings.

Dazed_and_C0nfused

QrizB said:

Dazed_and_C0nfused said:

Sootyandspark said:

Dazed_and_C0nfused said:

Sootyandspark said:

@Dazed_and_C0nfused thanks for the replies so far and one final question - if first month’s pension (tax code 1257L) was £1276.69. Second month pension is £800.49 tax code D0 - will I ever get £1200 pension in future or was that just a one off. Is it possible to forecast? 

Presumably your pension increased to £1,334 for the second payment?

If so then whilst you are earning ober £60k at your employments then you will continue to pay 40% tax on your pension, getting £800/month after tax.

That is only going to change when you stop work or reduce your hours further so you aren't paying higher rate tax at your job.

Gross has been £1333.69 both months. I assume I just didn’t pay enough tax last month so this balances it out. Last month’s tax was £57 - which now thinking about it, was low. I assume the pension will level out in the coming months and be different in the new financial year as the reduced salary and pension together won’t be pro-rata? 

Nothing more is likely to change re your pension now.

How much do you expect your P60 in April 2027 to show for your job?  If that is >£50,270 then I wouldn't expect the tax code for your pension to change next year either.

But am a bit confused why you put this in your original post 🤔

first month’s pension (tax code 1257L) was £1276.69

From OPs posts:

- Gross £1333.69 both months (and ongoing)

- Net first month £1276.69, tax £57.00

- Net second month £800.49 (so tax was £533.20)

The oddest thing I can see about that is that 60% of £1333.69 is £800.21 not £800.49!

Got It now thanks.

It is due to only whole pounds being taxed under PAYE procedures.

No doubt the D0 code would have been issued on a non-cumulative basis so just £1333.00 of the second payment would have been taxed, not the whole £1,333.69.