Q. I am 65 in January next year, so will reach state retirement age before the introduction of the new Single Tier State Pension next April. I have a feeling that I will be worse off than I would be if I was younger, but am not sure. What can I do to find out?

A. Men born on or after 6 April 1951 and women born on or after 6 April 1953 will have their pensions paid under the new rules, but people such as yourself will be have their pension calculated on the existing basis. It is worthwhile getting an estimate of the amount of State Pension you will receive, which will depend on a number of factors, such as your NI record, and whether you were contracted-out. There are some facilities for people in your age bracket to pay extra “Class 3A” NI contributions to secure up to £25per week extra state pension, which could be a good way to boost any shortfall, as the costs appear to compare favourably to the equivalent amount contributed privately. A good starting point is to obtain a State Pension Forecast at www.gov.uk/state-pension-statement .

Q. I am thinking of buying a house for £275,000. Will I have to pay stamp duty?

A. You have to pay Stamp Duty Land Tax (SDLT) if you buy a residential property in the UK valued over £125,000. This is charged on all purchases of houses, flats and other land and buildings. Scotland has its own Land and Buildings Transaction Tax.

Previously, SDLT was charged at a single rate for the entire price of a property. Since  4 December 2014, SDLT is now charged at increasing rates for each portion of the price.

The SDLT rates are:

  • nothing on the first £125,000 of the property price
  • 2% on the next £125,000
  • 5% on the next £675,000
  • 10% on the next £575,000
  • 12% on the rest (above £1.5 million)

Therefore in your example, if you buy a property for £275,000, you’ll pay £3,750 of SDLT. This is made up of:

  • nothing      on the first £125,000
  • £2,500 (2%)      on the next £125,000
  • £1,250 (5%)      on the remaining £25,000

 

If you have a question you would like Trevor to answer, please email it to: yourmoney@rwpfg.co.uk or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS.

0191 217 3340