Q. I am 62, and looking forward to getting my state pension in September 2017 when I will be 65. I requested a forecast a few years ago which said I would get basic state pension of £107.45 a week plus an additional pension of £39.00 per week, giving a total of £146.45 per week. I have been told this might not be accurate as the system is changing in April 2016. Is this right, and what might I receive?
A. You are correct that the system is changing, but it is likely you will receive broadly the same amount. It would appear that your forecast is from the 2012-13 tax year, when the full basic pension was £107.45 per week. The change being brought in from April 2016 is to have a single level of pension. When the amount was first announced, coincidentally in the same year in 2012-13, it was to be £144 per week. Because you have more than that under the existing system, this amount will be protected. The amount payable will also be upgraded for inflation from that original level. The actual amount will be set in Autumn next year, but will not be less than £148.40per week. Your protected amount will also have increased slightly. Ultimately the new system will be simpler, with everyone getting the same amount provided they have the necessary number of qualifying years, which is 35, an increase from the current level of 30. For full details see https://www.gov.uk/new-state-pension/overview.
Q. I am a member of my employers pension scheme which also provides me with 3x my salary as death in service cover. Up until now I nominated 100% of this to go to my wife. Now our mortgage has been paid off I don’t think my wife would need all the money if I were to die so I have changed this to 40% to her and 30% to each of our 2 grown up children. I have discussed this with my wife and she agrees as after all she would still get a widows pension. Are the pension scheme trustees obliged to follow my wishes exactly?
A. An expression of wish is just what it says. It is not legally binding on the pension scheme trustees to follow a pension scheme members wishes but in the vast majority of cases they will. Trustees have a difficult job carrying out their duties because not only do they need to consider the deceased’s wishes they need to consider the wider picture and consider anyone who may have been financially dependent on the deceased. There job is made much easier if at least the deceased’s wishes are clear and up to date. I would recommend that everyone regularly reviews their expression of wish forms to ensure that the people they wish to benefit are nominated as this will make the pension scheme trustees duty a little easier.
Q. I am about to retire and would like some information on how I will be taxed. Is there anywhere I can go for help?
A. Her Majesty’s Revenue and Customs (HMRC) has a very helpful web site containing all of the information you are likely to need at www.hmrc.gov.uk/pensioners. If you are not keen on the internet then alternatively you can simply telephone your local HMRC office or enquiry centre. The telephone number for Newcastle is 0844 474 0101.
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
