Retiring from driving... tax & pension boring bits

[Wrex]

I've been working with a local bus company that does small routes around local villages for the last few years after leaving my job before that due to my age. I have some dull, boring questions about tax I'm not too sure about. firstly, I'll be retiring from driving next year and was wondering how pension works re: taxes. I've put what it'll be into this tax website I found but not sure if I'll actually pay taxes on pensions? Hoping someone here can answer My next question is if I retire halfway through the year, what happens with tax? will the same amount of taxes come out of my pensions as my income before that?

 

[A0]

I've been working with a local bus company that does small routes around local villages for the last few years after leaving my job before that due to my age. I have some dull, boring questions about tax I'm not too sure about. firstly, I'll be retiring from driving next year and was wondering how pension works re: taxes. I've put what it'll be into this tax website I found but not sure if I'll actually pay taxes on pensions? Hoping someone here can answer My next question is if I retire halfway through the year, what happens with tax? will the same amount of taxes come out of my pensions as my income before that?

You should probably seek the advice of an independent financial advisor. To answer 'generally' though

Income up to £ 11,850 is not subject to income tax, so if your pension is less than that, you'll not be taxed on it, if it's over, then for every £ 1 over you'll be taxed at 20%.

On mid year change, you should notify your tax office that you are no longer working and give an indication of your pension income, they should then re-code you appropriately. At the end of the tax year your former employer should send you a P60 which details any income you were paid during the year and that combined with your pension will need to be declared to the inland revenue who will advise if there is any tax outstanding or if a refund is due.

HTH.

 

[Basher]

Your state pension is not taxed at source, but if you have other income ie private pensions then the pension company will be sent a tax code by HMRC to instruct them to include your state pension in the tax deduction calculation.
Sorry it's a club we all have to be members of

 

[CD]

Your state pension is not taxed at source, but if you have other income ie private pensions then the pension company will be sent a tax code by HMRC to instruct them to include your state pension in the tax deduction calculation.
Sorry it's a club we all have to be members of

Throughout your working life if you pay into a private pension it is tax free. But when you retire and buy an annuity the payments you receive are subject to income tax. .

 

[jmh59]

Also go here https://www.gov.uk/personal-tax-account (you need to sign up for it) - useful info about your actual tax paid and future projections. Having just retired (but still 7 years to go until I get State pension...) it did show that HMRC know about my superan pension and have adjusted the tax code etc.

HRMC do offer advice too but I suspect it's general, rather than what you'd get from a personal tax adviser.

 

[Pigalle]

You might want to make an appointment with Pension Wise, the government’s pension guidance service, to understand your options:

https://www.pensionwise.gov.uk/en