What is a Qualifying Year for state pension purposes?

To get the maximum Basic State Pension, you must have 35 qualifying years (which means you must have made National Insurance contributions for 35 years). For the current tax year – 2022/23 – this would mean a salary of more than £6,396.  Above this figure, you start...

Tax relief on Pension lump sum withdrawals

If you are thinking of taking a lump sum from your pension fund, you should definitely talk to your accountant to go through the tax issues.  Pension lump sums are taxable income so it is important to minimise the tax you pay or the extra tax cancels out the tax...

The Annual Pension Allowance – and overfunding

The general rule is: For pension contributions, there is an Annual Allowance (of £40,000 for 2020/21) which is the maximum one can pay into a pension scheme in a tax year.  If you (or your employer) don’t use all of the Annual Allowance, then you can carry...

What tax will I pay on a pension lump sum?

Since April 2015, people with private pension funds have had far more freedom about what they can do with their “pot” and many more people are taking advantage of this. They are able to take their whole pension as a lump sum without having to buy an annuity or similar...

How is my wife’s state pension bigger than mine

Good question.  It’s because we used to have two types of State Pension: the Basic State Pension and the Secondary State Pension (formerly SERPS). You probably didn’t receive a Secondary State Pension because, until April 2016 self-employed NI contributions didn’t...

Tax Relief on Pensions

There are a few issues that we regularly see around the subject of tax on pensions:  Employees earning over £46,350 (the Higher Rate Tax threshold for 2018/19), sometimes think they will automatically obtain tax relief on their contributions when they pay into a...