Q. In a previous reply you mentioned a service where you can trace previous pension schemes. Can you give me further details of this?
A. The Pension Tracing Service is a free service run by the Department for Work and Pensions and aims to reunite people with Pension savings they may have lost track of over the years. It is a free service and you can contact them on 0345 6002537. Alternatively, they have just launched a new website at https://www.gov.uk/find-pension-contact-details . Please note if you look on a search engine there are a number of copycat websites which appear to offer the same service but will end up charging you, so make sure you get the .gov.uk website. You will need to know the name of the previous employer/s who you used to work for, or the insurance company you took the policy out with, and the service gives you the up to date contact details for you to write to them to ask about any pension benefits you may have. There are apparently £400million of unclaimed pensions, so if any of that is yours, it is better in your pocket than going unclaimed.
Q. I normally pay tax at the rate of 40% and I currently pay into a Group Personal Pension via my employer. I understand I get tax relief, but a colleague of mine has suggested that I can obtain additional tax relief. Is that true, and if so have I been missing out?
A. This question is not quite as straightforward as it may appear. The answer is “yes, possibly” but it depends how your contributions are collected and paid.
If your contributions are deducted from your net salary, you may well be able to claim tax relief representing the difference between basic rate tax (20%) and your rate of tax (40%). This is because Personal Pension Plans assume tax relief is due at only the basic rate of tax (20%) and this is the amount reclaimed automatically on your behalf. You should complete a tax return, detailing how much you have earned and the pension contributions you have made.
HMRC rules permit you to backdate claims by up to four years. Therefore, if you have paid tax at 40% for the past four years, you have contributed to a Personal Pension and you have not claimed your Higher Rate tax relief on contributions, you might be due a significant sum.
This point is relevant to other Personal Pensions and not just Group Personal Pensions.
If however, your employer has set the scheme up on a “Salary Sacrifice” basis, you will have already received tax relief at 40% and you will be ineligible for a refund.
Other types of group pension arrangements can also be receiving full tax relief, so before you do anything, find out how your contributions are collected and then claim your tax refund if appropriate.
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.
