Pension credit dilemma

sparrer

I started to draw my both my state and company pensions on reaching 60 last July, looked into pension credits but my income is 17p per annum too much to claim anything :doh:. That was fine, but I've now got a letter from IR telling me I owe them £253 to cover a shortfall last year, although in fact I wasn't working for the 2 years prior to reaching 60. They are going to take this £253 from my pension 4 weekly which will obviously bring my income down enough to apply for pension credits.

I considered contesting the repayment of the £253 as I can't see why I would owe it, but am interested to know how much pension credit I'd be awarded. The question is, what to do - accept that they're 'always right' and I do owe this money, or take a chance on them deciding at some time in the future that I didn't owe it after all, and then claiming back any credits I might be awarded?

dunstonh

Were either of the pensions paid gross?
Is you total income (including savings interest and other unwrapped investment income) over £20,900 a year?

sparrer

dunstonh wrote: »

Were either of the pensions paid gross?
Is you total income (including savings interest and other unwrapped investment income) over £20,900 a year?

First, sorry I typo'd. Theyre taking £273, not £253.


I've been paying tax on the pensions since the first payment last Aug, in the region of £10 a week. Savings - £15 premium bonds, less than £1k in current a/c, no other investments, savings or a/c's.

They're estimating my allowance to be £5435, my net income is £5886, a difference of £451, yet on paper they're saying they're claiming tax on £513. Not a lot but still a discrepancy. Given me a tax code of K50.

Why can't these departments KISS? (Keep it simple, stoopid)

cyclonebri1

Pick up the phone and call the relevant tax office, it's much easier. I had just this issue last week but probably for a different reason. I has a charge for back tax of £223 carried over to my 2008/9 allowance, there was no reason given for this. A 5 minute call and it appears it was due to the IB I received from Jan 2008 not being taxed claimable untill the new tax year;)

sparrer

Thank you wakeupalarm, I think you're right and it could be owed from a previous year. I've check the site you suggested and may be entitled to £2.80 a week pension credits. Not a princely sum but every penny helps:rolleyes:

sparrer

Thank you cyclonebri1, I've just this second put the phone down from IR and they confirm it is owed on previous IB claim. He ran through the figures and seems I'll in fact be fractionally better off. However do they work out that I owe them money but will be better off weekly, confusing, aren't they? Perhaps I'll offer to pay them even more and see how much more they reward me with:rotfl:

EdInvestor

If you get pension credit you can also claim for council tax and housing benefit if renting.

sparrer

EdInvestor wrote: »

If you get pension credit you can also claim for council tax and housing benefit if renting.

Thank you EdInvestor. I actually get these already as I'm on a low income but there seems to be quite a list of things I could claim if I wanted to while getting pension credits. It seems odd that I was a mere 17pence over the limit yesterday and could get little, but today they're taking money back from me which means I can claim p/credits and a lot more besides. What a c*ck-eyed system :doh:!