I have just received my (small) Private Pension payment under the new Tax rules. I am early retired (not my choice,I was made redundant at 61)and at the moment this is my only pension. Despite the increase of £210 in the personal allowance this year the removal of the 10% tax rate means that of my £98pa pension increase, £36 of it goes in extra tax.
Am I glad I took the maximum lump sum from my pension. Although I have to pay tax on the interest, the fact that its in a joint account with my wife and she isn't a tax payer means we only pay half what it might be. And we transfer tha maximum amount each year into ISAs which further reduces the tax we pay on our savings.
I think this would only apply to savings. The Banks will only assume 50/50 on joint savings accounts I believe. Of necessity ISAs are in separate names so we are doing our best there. I think personal allowances are only transferrable if you are receiving the Married Couples Allowance and we don't qualify for that.
I stand corrected if I have got any of this wrong.
Wait till you start receiving letters and claim forms from the government, telling you that there are vast amounts of unclaimed money, that you might be entitled to. Then you find that you are in a catch 22 situation ;o)
It's not just the low earners being stung by Gordons policies. My County Council has been given an increase of £7m in grant from Central Government this year. Unfortunately this means they are no longer eligable for £14m of other grants. Net result -- the government can truthfully say ( now theres a new concept)that the grant from them has increased but in reality the Local Council Tax payer has to stump up collectively the £7m shortfall.
Of course people will bash the local authority leaving the Government to claim the credit for being generous with their grants. The realty is somewhat different -- its called spin
Quote from John Hutton in a discussion on the abolition of the 10% band: "We are talking in the worst case scenario about half a per cent of net income being the scale of the maximum loss that someone might have."
The net amount of my very modest pension has fallen by 2.3%............where do politicians get their figures from?