State pension/tax codes

eastcorkram

My state pension starts this week. I am already in receipt of a DB pension, which has a code of 1243L. 

Do DWP inform HMRC that the SP has started, so they can adjust the code on the DB? Or do I have to do that? If they do it, will it be done within a month? 

Then, probably after April, I will start to draw from a DC, so presumably that will also get a code. Do I have to do anything with that in relation to tax, or will the provider sort that out. It's with HL. 

Brie

Mine was done all automatically.  

Dazed_and_C0nfused

eastcorkram said:

My state pension starts this week. I am already in receipt of a DB pension, which has a code of 1243L. 

Do DWP inform HMRC that the SP has started, so they can adjust the code on the DB? Or do I have to do that? If they do it, will it be done within a month? 

Then, probably after April, I will start to draw from a DC, so presumably that will also get a code. Do I have to do anything with that in relation to tax, or will the provider sort that out. It's with HL. 

DWP notify HMRC shortly after your State Pension starts (the date you are entitled to it, not when you receive a payment).

The amount included in your tax code will depend on whether you are already paying tax or not on your DB pension.

Hl should use the emergency tax code (1257L) on the first payment from the DC pension and then once they have details of the first payment HMRC will calculate new codes.  A reduced one for your DB pension as you will likely owe some tax from the first DC payment, and BR for the DC one.

You don't need to do anything other than check the estimate of your DC pension is ok (no one, HL or HMRC, knows how much you will actually take as well as you do).

molerat

DWP will inform HMRC and they will allocate a new code to the pension.  It used to be fairly quickly but they seem to have slowed down - don't know the current lead time.  The code will look completely wrong but if you work the tax out across the whole year they are usually pretty close although you will likely end up with a small debit at the end of year to be carried forward to next year's coding.

Once you start the other pension the first payment will be at 1257LM1 and HMRC will then allocate a code.  That one will be done fairly quickly - likely next day -  as it is all done by the computer.

You don't need to do anything, just ensure the estimated incomes from each stream are correct and adjust as necessary in your on line tax account - something you will need to do each year.

IOWJJBTM2025

I would not worry if you are on standard state pension your income is = 52 x £230.25 = £11973 per year.
Whatever tax that will be owed will be taken automatically directly from your DB Pension.
Unless you have other income or large savings earning more than £1000 per year in interest you will be ok. 

eastcorkram

I'm wary of things that are supposed to happen automatically! I'll keep an eye on it. Earlier this year, I emptied a small DC with fidelity. So 25% tax free, and the rest taxed. They issued a P45 for that in May. They said that automatically goes to HMRC. I can't see any sign of that on my online account. The db is there, and the figure is correct. Nothing else is mentioned. Expected amount of tax for the year is zero, but obviously, that doesn't factor in that SP is starting. Though I already paid around £2,000 tax on that DC. There's no mention of that online, even though that was back in May. Then again, I'm not sure am I meant to be able to see that, or does it not become visible until the year is finished and then they'll list all sources of income in an annual summary. 

Flugelhorn

when SP starts DWP will report to HMRC as a payment and pension provider will get a new code - mine probably arrived the same time as my first SP payment

Albermarle

eastcorkram said:

I'm wary of things that are supposed to happen automatically! I'll keep an eye on it. Earlier this year, I emptied a small DC with fidelity. So 25% tax free, and the rest taxed. They issued a P45 for that in May. They said that automatically goes to HMRC. I can't see any sign of that on my online account. The db is there, and the figure is correct. Nothing else is mentioned. Expected amount of tax for the year is zero, but obviously, that doesn't factor in that SP is starting. Though I already paid around £2,000 tax on that DC. There's no mention of that online, even though that was back in May. Then again, I'm not sure am I meant to be able to see that, or does it not become visible until the year is finished and then they'll list all sources of income in an annual summary. 

AFAIK You should be able to see that on your account.
Last tax year I did two small pot withdrawals, and they both appeared on my online tax account quite quickly. In fact three appeared as one was duplicated!

eastcorkram

Albermarle said:

eastcorkram said:

I'm wary of things that are supposed to happen automatically! I'll keep an eye on it. Earlier this year, I emptied a small DC with fidelity. So 25% tax free, and the rest taxed. They issued a P45 for that in May. They said that automatically goes to HMRC. I can't see any sign of that on my online account. The db is there, and the figure is correct. Nothing else is mentioned. Expected amount of tax for the year is zero, but obviously, that doesn't factor in that SP is starting. Though I already paid around £2,000 tax on that DC. There's no mention of that online, even though that was back in May. Then again, I'm not sure am I meant to be able to see that, or does it not become visible until the year is finished and then they'll list all sources of income in an annual summary. 

AFAIK You should be able to see that on your account.
Last tax year I did two small pot withdrawals, and they both appeared on my online tax account quite quickly. In fact three appeared as one was duplicated!

Maybe I'll have to ring HMRC . I did query it with fidelity, in June or July , about the P45 figures not showing up in the online tax account. They said there's nothing else they can do, as it gets reported automatically. 

Talking of things that should happen.......i applied for the SP, six months before it was due. This is what you are supposed to do, if you worked in another country. That was to the international pensions centre. They did their bit, for the UK side of things, and I received the pension award letter. They then forward the other part to Ireland. 

I didn't hear anything about that, so rang the relevant dept in Ireland. They've no record of the application. Back on the phone to UK section, who basically just say, well we sent it. We'll send it again. Left it a week or so, Ireland still have no record of the application. They sent me a form to apply directly to them. 

Filled in, sent by post , international tracked. Cost £12.57 for an A4 envelope. That was ten days ago. Not been delivered, and the tracking number history only has one event, and that's me handing it to the post office. It's not the sort of thing you want to go missing. Contains several of my addresses, as it asks for your address while you were working at all workplaces you've had. Has my current address, bank account number, national insurance number etc. I asked about it yesterday at the PO, and they just said give it a few more days.  I'm not sure what tracking I've paid for, when no tracking seems to be happening. Or if the tracking is accurate, the letter is still in the village post office just along the road from me. They adamant it left the day I took it in. 

Oh, and you can apply for a bus pass, 60 days before your birthday. So I did. Had an email within a couple of days saying , application successful, and it would be posted to me ten days before the birthday. That hasn't happened either:( 

Dazed_and_C0nfused

eastcorkram said:

I'm wary of things that are supposed to happen automatically! I'll keep an eye on it. Earlier this year, I emptied a small DC with fidelity. So 25% tax free, and the rest taxed. They issued a P45 for that in May. They said that automatically goes to HMRC. I can't see any sign of that on my online account. The db is there, and the figure is correct. Nothing else is mentioned. Expected amount of tax for the year is zero, but obviously, that doesn't factor in that SP is starting. Though I already paid around £2,000 tax on that DC. There's no mention of that online, even though that was back in May. Then again, I'm not sure am I meant to be able to see that, or does it not become visible until the year is finished and then they'll list all sources of income in an annual summary. 

What was the leaving date shown on the P45?

HMRC stopped getting P45's from employers and pension payers over 10 years ago now.  They get the payroll data via the Real Time Information system now.

But if the pension was paid during 2025/26 and the pension payer provided a leaving date to match that then I would expect you to be able to see it.

eastcorkram

Dazed_and_C0nfused said:

eastcorkram said:

I'm wary of things that are supposed to happen automatically! I'll keep an eye on it. Earlier this year, I emptied a small DC with fidelity. So 25% tax free, and the rest taxed. They issued a P45 for that in May. They said that automatically goes to HMRC. I can't see any sign of that on my online account. The db is there, and the figure is correct. Nothing else is mentioned. Expected amount of tax for the year is zero, but obviously, that doesn't factor in that SP is starting. Though I already paid around £2,000 tax on that DC. There's no mention of that online, even though that was back in May. Then again, I'm not sure am I meant to be able to see that, or does it not become visible until the year is finished and then they'll list all sources of income in an annual summary. 

What was the leaving date shown on the P45?

HMRC stopped getting P45's from employers and pension payers over 10 years ago now.  They get the payroll data via the Real Time Information system now.

But if the pension was paid during 2025/26 and the pension payer provided a leaving date to match that then I would expect you to be able to see it.

Leaving date on fidelity P45 is 13/05/25