Live Q&A

14 December 2011

This session is now closed

Previous Q&A Session Questions

Q & A's

I have an AVC due to mature in February when I will be 63. I have an Armed Forces Pension payable since I reached 60 and a deferred Final Salary Pension from my employer. I am now no longer employed and living off savings/Forces Pension. My AVC only gives me the choice of 25% as a tax free lump sum but the entire amount does not exceed 25% of my "pension pot". Can I acquire the total amount as part of the tax free allowance or will I have to transfer it to another scheme to mature at the same time as I take my Employer's Final Salary in order for it to be paid in full?

David Bell, 14/12/11 02:03

You have advised us separately that this is an FSAVC and not an AVC. In which case the maximum lump sum available will be 25% of the value of the fund. There are no allowances to take more.

You can transfer your fund to another pension arrangement. But you will not be able to transfer to your deferred final salary scheme or armed forces scheme. Transfers into occupational pension schemes are not possible once you have left active service.

You could transfer to a personal pension-style product. But you will still be restricted to taking 25% as a lump sum.

Regards, TPAS

My Annuity began on Sunday 6 November 2011. This new annuity is with the same company that held my “Section 226 Private Retirement Plan” pension fund from which it was converted. By what dates should both my 25% lump-sum amount and, subsequently, my first monthly-in-arrears annuity payment have been wired to my bank? In other words, is there a government statute which regulates (and therefore limits) the amount of time that can be allowed to elapse before each of the above 2 payments are made?

Nicole P., 14/12/11 02:03

There are no statury timescales for your provider to make payments to your bank account. Each insurers has its own timescales. All we can say is that it should be paid within a 'reasonable' amount of time.

Regards, TPAS

i know the state pension going up to 107.45p in april 2012.will the s2p will be increased also by the cpi inflation.

lynne meyer, 14/12/11 02:25

The additional state pension, otherwise known as SERPS and then the State Second Pension (S2P, will increase in April 2012 in line with the annual increase in the Consumer Price Index (CPI). The rise will be 5.2%.

Regards, TPAS

My state pension is due to be paid into the bank on Boxing Day, will it be paid earlier than this?

Jean, 14/12/11 02:07

The Pension Service has advised us that if a payment date falls on a public holiday, such as Boxing Day which is on a Monday this year, they will bring payment forward to the previous working day.

Your should therefore receive payment on Friday 23 December 2011.

Regards, TPAS

I have a client whose income is normally below her personal allowances and therefore is a non-taxpayer. Upon claiming her deferred state pension and the lump sum, in November 2010, she completed the form on this basis and therefore no tax was deducted from the lump sum (£5,299). However, on 29 March in the same tax year she surrendered an investment bond and a chargeable event arose. Ignoring top-slicing relief, this meant that her income exceeded her personal allowances by £1,935 and this has brought the whole of the £5,299 lump sum into charge at 20%. Our client is being penalised in two ways under two parts of the legislation that is supposed to prevent an excessive tax charge arising: - • The client has not been given relief for the full notional tax credit on the chargeable event which would cover the tax due on the pension – The £1,332.80 notional tax credit would cover the entire liability for the year of £1,248.80 but only £193.50 is being utilised. • The HMRC website has not granted the top-slicing relief to which I believe the client is due, which would mean that the client is a non-taxpayer for 2010/11. I should be grateful for your thoughts. Regards

Denise Bowen, 14/12/11 02:01

We are sorry but we are unable to offer any assistance. Firstly, we are not funded to provide techincal support for professionals, such as IFAs, solicitors and accountants. And secondly, enquiries relating to an individual's tax should be referred to HMRC.

Regards, TPAS

Only questions submitted during a live Q&A session appear here. You do not have to wait for a live Q&A session if you have a question. You can send us a question at any time by completing an online enquiry form.

Share with:

Contact Us

There are a number of ways to contact us.

We regret, however, that we are unable to accept visitors at our office.

Call
0845 601 2923
or email us

Ask Our Experts
Our pension experts will be happy to answer your questions

Live Q&A
We will even answer your questions live online.
Next session at 2pm on 13 June 2012

New! Saving For Retirement Planner

We have launched a new planner to help with your retirement planning. It can help you identify whether or not you are on course for a comfortable retirement.