Tax all sorted out - pension from Nov 2020

[stephen500]

Just to keep you in the loop for those stopping work part way through the tax year.
I got HMRC to issue a tax code for RMSPS and they made that my main earnings. (I had to wait to be issued my P45)
They also gave my RMPP a BR cum tax code (which means basic rate 20%)
So tax with RMSPS from Jan onwards is zero, for RMPP is £29.20.
They will owe me £39 as a rebate.
As for the next tax year 2021-22 I will have no job and as both my pensions (RMSPS + RMPP ) are below my tax allowance, I will pay no tax and they will spilt my tax code between the two pensions.
For this tax year, they could not spilt my code in three, so they will owe me a tiny amount.
This month I am also due my £750 pension advice money and am told by CWU LTB that I am due to pay tax and nat ins on it and that is what I expect to pay.
However RMPP said that because they pay through the pension pay roll, they cannot see me paying Nat Ins on it? Who knows?
I am also due to get my final cash balance excess fund and because I have a BR cum tax code (20%) I don't expect to pay more than 20% on the 75% that is due to be taxed. I will let you know what happens. If they do take more tax, then I will be able to claim it back, or it will come automatically part way through the next tax year, as this year my earnings and pensions will be below the 40% threshold.
Almost done with pensions, lump sums and taxes.
Be glad to forget about it all, once I have my tax codes assigned between the two, in the next tax year!

[onejontwo]

Just to keep you in the loop for those stopping work part way through the tax year.
I got HMRC to issue a tax code for RMSPS and they made that my main earnings. (I had to wait to be issued my P45)
They also gave my RMPP a BR cum tax code (which means basic rate 20%)
So tax with RMSPS from Jan onwards is zero, for RMPP is £29.20.
They will owe me £39 as a rebate.
As for the next tax year 2021-22 I will have no job and as both my pensions (RMSPS + RMPP ) are below my tax allowance, I will pay no tax and they will spilt my tax code between the two pensions.
For this tax year, they could not spilt my code in three, so they will owe me a tiny amount.
This month I am also due my £750 pension advice money and am told by CWU LTB that I am due to pay tax and nat ins on it and that is what I expect to pay.
However RMPP said that because they pay through the pension pay roll, they cannot see me paying Nat Ins on it? Who knows?
I am also due to get my final cash balance excess fund and because I have a BR cum tax code (20%) I don't expect to pay more than 20% on the 75% that is due to be taxed. I will let you know what happens. If they do take more tax, then I will be able to claim it back, or it will come automatically part way through the next tax year, as this year my earnings and pensions will be below the 40% threshold.
Almost done with pensions, lump sums and taxes.
Be glad to forget about it all, once I have my tax codes assigned between the two, in the next tax year!

As I am in pretty much the same position as you (Took early retirement on 16/01/2021) but only worked 2 months shy of 14 years, I don't get anywhere near the pension pot you've accrued. However could you tell me how to apply for the pension advice money and also how do you get HMRC to alter your tax code so soon. Ie is there a form you fill in or do you just write to them?

[stephen500]

Just to keep you in the loop for those stopping work part way through the tax year.
I got HMRC to issue a tax code for RMSPS and they made that my main earnings. (I had to wait to be issued my P45)
They also gave my RMPP a BR cum tax code (which means basic rate 20%)
So tax with RMSPS from Jan onwards is zero, for RMPP is £29.20.
They will owe me £39 as a rebate.
As for the next tax year 2021-22 I will have no job and as both my pensions (RMSPS + RMPP ) are below my tax allowance, I will pay no tax and they will spilt my tax code between the two pensions.
For this tax year, they could not spilt my code in three, so they will owe me a tiny amount.
This month I am also due my £750 pension advice money and am told by CWU LTB that I am due to pay tax and nat ins on it and that is what I expect to pay.
However RMPP said that because they pay through the pension pay roll, they cannot see me paying Nat Ins on it? Who knows?
I am also due to get my final cash balance excess fund and because I have a BR cum tax code (20%) I don't expect to pay more than 20% on the 75% that is due to be taxed. I will let you know what happens. If they do take more tax, then I will be able to claim it back, or it will come automatically part way through the next tax year, as this year my earnings and pensions will be below the 40% threshold.
Almost done with pensions, lump sums and taxes.
Be glad to forget about it all, once I have my tax codes assigned between the two, in the next tax year!

As I am in pretty much the same position as you (Took early retirement on 16/01/2021) but only worked 2 months shy of 14 years, I don't get anywhere near the pension pot you've accrued. However could you tell me how to apply for the pension advice money and also how do you get HMRC to alter your tax code so soon. Ie is there a form you fill in or do you just write to them?

I rang RMPP who told me to Ring HR.
Ring HR on 0345 60 60 603 and remind them of your last day of service and that you have taken your NRA 65 (You must have taken your NRA 65) and ask for your Financial advice allowance. You must do this within 13 weeks of leaving Royal Mail.
You qualify as long as the new CDC in not in payment (you are not in this scheme, nobody is at present) and you have taken NRA 65.
Although they did say they pay it automatically and lots of people ring them up when they find they have hundereds of pounds in their bank account.
I don't trust that though, so I rang them.
Proof of the pudding will be on the 29th January, when it is due!
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As for Tax I rang HMRC on 0300 200 3300 after my P45 had been received and they answered the phone quite quickly.
Do not ring them before you get your P45 from Royal Mail.
It might also be wise to have at least one payment from RMSPS and RMPP.
Explain you have finished work and ask them to move your main tax allowance to RMSPS.
They will not do this for RMPP this tax year.
Ask them to make RMPP BR Cum (basic rate) for this tax year. You will pay tax on that till the end of the tax year.
As long as you were up to date with PAYE, you should not pay tax on RMSPS (as long as your pension is below around £240 per week on the standard tax allowance)
You will be too late for January, but perhaps will make Feb.
But it is still important to get BR CUM tax code for RMPP as this may ensure you only pay 20% tax on the excess cash balance scheme, for which you pay tax on 75% of the money.
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Ring HMRC once the new tax year starts and explain how much your annual pension is for each of the pension schemes, RMSPS and RMPP, so they can spilt your tax codes, to cover the whole of your pension income, so you don't have to pay any tax next year.
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As for me and tax, I should be straight with them for the start of the new tax year and have my whole £12500 allowance.
My pension is within that limit, so I shouldn't be paying any tax next year, until I get my state pension in years to come.

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[deltaforce]

Don’t forget that when your state pension kicks in, it will be paid gross without tax. They will offset your tax allowance else where to collect due tax or they may send you a tax demand at the end of the relevant tax year.

[onejontwo]

After reading your reply several times I am now in a much better position to understand the minefield of RM pension and tax. So thanks for that, and If you don't mind me asking, as you've just been through the early retirement process, did you get your last payslip/payment on your last week of notice or the week after you'd finished? The reason I am asking is that I can't remember (as it was almost 14 years ago) if RM work a "week in hand " initially on first starting or did we get paid on the first week? In which case I am either straight or owed another weeks wages.

[RobertT]

After reading your reply several times I am now in a much better position to understand the minefield of RM pension and tax. So thanks for that, and If you don't mind me asking, as you've just been through the early retirement process, did you get your last payslip/payment on your last week of notice or the week after you'd finished? The reason I am asking is that I can't remember (as it was almost 14 years ago) if RM work a "week in hand " initially on first starting or did we get paid on the first week? In which case I am either straight or owed another weeks wages.

Basic pay and allowances are paid the work you work them, any overtime is paid the following week.

So if you leave on the Saturday, that weeks payslip should be your last, unless you did some OT.

[stephen500]

Don’t forget that when your state pension kicks in, it will be paid gross without tax. They will offset your tax allowance else where to collect due tax or they may send you a tax demand at the end of the relevant tax year.

Thanks, but I will worry about that on the 1st December 2027, when I will be 66 years and 10 months old.
I will then contact the tax office and have them adjust one of my tax codes, so that my state pension is taken into account.
The beauty of retiring at 59 and 10 months and not working is not paying tax.
I never wanted to take my pension and carry on working, paying tax on it.
So I am happy, that a huge hike in inflation excepted, I don't plan to ever work again and therefore avoid tax till 2027.
I hope this did not come across as patronising.
Thanks for the heads up.

[stephen500]

After reading your reply several times I am now in a much better position to understand the minefield of RM pension and tax. So thanks for that, and If you don't mind me asking, as you've just been through the early retirement process, did you get your last payslip/payment on your last week of notice or the week after you'd finished? The reason I am asking is that I can't remember (as it was almost 14 years ago) if RM work a "week in hand " initially on first starting or did we get paid on the first week? In which case I am either straight or owed another weeks wages.

The week after you cease service, you will only get ad hoc allowances, no other pay except below.
If like me you were on a permament shift, you won't get them as they will have already been paid.
But if you are either owed SA or OT payments you will get them as well as pay for any leave that they owe you.
I took my leave on the 4th Dec and got paid for my leave on the 11th Dec, my last day of service, However the following week, the 18th I only got my SA holiday payment.

[fly-catchers]

After reading your reply several times I am now in a much better position to understand the minefield of RM pension and tax. So thanks for that, and If you don't mind me asking, as you've just been through the early retirement process, did you get your last payslip/payment on your last week of notice or the week after you'd finished? The reason I am asking is that I can't remember (as it was almost 14 years ago) if RM work a "week in hand " initially on first starting or did we get paid on the first week? In which case I am either straight or owed another weeks wages.

Basic pay and allowances are paid the work you work them, any overtime is paid the following week.

So if you leave on the Saturday, that weeks payslip should be your last, unless you did some OT.

They never did pay me the outstanding 5 hours from my leave I was owed! Numerous phone calls which has probably used the cash up anyway and just fobbed off! My key regret now I have left RM is I didn't take more sick leave! Rule number One NEVER be loyal to RM as they don't give a toss about you!

[renrag40]

After reading your reply several times I am now in a much better position to understand the minefield of RM pension and tax. So thanks for that, and If you don't mind me asking, as you've just been through the early retirement process, did you get your last payslip/payment on your last week of notice or the week after you'd finished? The reason I am asking is that I can't remember (as it was almost 14 years ago) if RM work a "week in hand " initially on first starting or did we get paid on the first week? In which case I am either straight or owed another weeks wages.

Basic pay and allowances are paid the work you work them, any overtime is paid the following week.

So if you leave on the Saturday, that weeks payslip should be your last, unless you did some OT.

They never did pay me the outstanding 5 hours from my leave I was owed! Numerous phone calls which has probably used the cash up anyway and just fobbed off! My key regret now I have left RM is I didn't take more sick leave! Rule number One NEVER be loyal to RM as they don't give a toss about you!

correct.

[SeanMc]

Totally agree. I was in the job 35years and didn’t have even 1 days sick the whole time and not only was there no recognition of this but they can’t even pay me my pension on time. I was 60 a couple of weeks ago and despite chasing it up with them they still haven’t even sent me my options forms for NRA 60. Thanks RM.

[deltaforce]

Probably but it could be stuck in the postal system that’s in chaos at the moment.