friends Basic state pension - help?

[honeybee13]

Remind us if the friend was executor for his wife please?

 

HB

[honeybee13]

On 14/01/2020 at 15:04, HP Mum said:

Asking for a friend:

Born in '48; doesn't have a UK passport, but educated here and owns property here, resident for most of adult life - although each year split between UK/ abroad.

Ran own business  about 40y ago but is vague on if ever was given a NI number ... 

Certainly doesn't have it to hand.

Also can't remember anything about tax returns ??

Had some income generated overseas at other residence.  Was wealthy, kind of a person of independent means.   But not now.

How do I assist on ascertaining if eligible for basic state pension?

Would have been able to claim since 2013, but hasn't.

I have access to some boxes of private papers - where might I find the NI# or something else that may help locate it?

Friend currently abroad.

 

 

 

I'm just putting this here to remind us where we started at.

 

I'm having trouble understanding how he could live in the UK and have no relevant paperwork. If he had a company surely he would have paid tax and there would be records?

 

HB

[Ethel Street]

Your friend does seem rather vague about all his business and tax affairs. 

 

I still think the only practical way forward is to, first, use the form CA 5403 I linked in post#6 to find out if he has a NI number. Without knowing that you are just going round in circles.

 

If doesn't have one then he cannot get a state pension in his own right because he hasn't made any NI contributions - NI contributions cannot be paid without an NI number. If he does have one he can use one of the routes already suggested to find out his contribution record or contact the Pensions Centre directly to find out what his entitlement is. Find his Pensions Centre here: https://www.gov.uk/find-pension-centre

 

I found this article about whether a man can get state pension based on his wife's contribution record. Possibly seems to be the answer, but I don't know if your friend would meet the criteria.

 

https://www.thisismoney.co.uk/money/pensions/article-7555243/Can-husband-claim-state-pension-wifes-NI-record.html

 

 

[HP Mum]

He has paperwork in the UK but his place is such a mess I don't know where to start looking.  He's away now.  And i think a bit confused.

The company he ran was apparently about 40y ago and I haven't found any paperwork relating to it.  Not sure if proper company or sole trader of if he ever made profit/ paid tax?  I have asked, but so far have not got any answers that will help me (in the Uk) help him.   From what I gather now, his wife earned an income and had started claiming pension - and it seems easier to claim as widowed spouse rather than via his own records - which I think potentially dont exist.

[HP Mum]

Thanks Ethel.

Yes he does.  Maybe age has got the better of him.  That's why I am trying to help.

Thanks for the article.  Will read now.

[honeybee13]

The thing is about asking for his wife's details is that whoever asks, as I understand it, will have to be entitled to ask. That's why I asked if he was executor.

 

How long ago did the lady die?

[HP Mum]

Just had a read of the link article.

The wife was born in '38. 

The article states that "the opportunity for men to claim on the wife's NI contributions under 'old' basic state pension system was only introduced at start of last decade [in 00s] ...  But only covers women born between certain dates".   After 5 April 1950 is the eligible date.   So in friend's case his wife was born too early for him to claim - if she was still alive? 

 

The article continues:

"...in the unfortunate event that you were to become a widower, you would be able to inherit part of any earnings-related state pension that your wife was receiving"

 

Do I understand this correctly:

because he was widowed in 07 (9 years) after his wife started claiming her state pension (in 98) that he can 'inherit' it? 

He wouldn't have been able to make a claim if she was still alive?  But can now she has passed?

 

The article says: "If married woman receiving SERPS  pension dies before her husband, he can inherit 50-100%"

 

I checked out the Gov link.

It says:  

Wife was automatically eligible for an additional state pension by her age (born before 1953) - unless she opted out - and due to reaching pension age before April 2016.

 

She would have got the 'Additional State Pension' if she contributed to the State Earnings-Related Pension Scheme if employed from 1978-2002.    She was.

 

The link re 'inheriting pension' shows:

woman born before 5 October 1942 - husband could inherit 100%

 

This has been very helpful info.. Thanks for the article link

 

 

 

 

Edited January 22, 2020 by HP Mum

[HP Mum]

I passed on the article and link to friend.

Between us we will now try get the required info to the correct location so that they (whoever in the Govt) can sort out what he is owed.

I will keep you updated.  This thread may help others in similar situations.

Ethel Street - very helpful research.  Thank you.  Seems like you came up trumps!

[HP Mum]

Update

Have received notes booklet and claim forms from dwp  for friend to fill in. 

Got certified copy of marriage certificate.

 

One query about tax?

Friend was eligible for his pension in 13. Became widower in 07.  If eligible for many years deferred pension payments - would tax be payable?  Is it that if takes all the deferred years in one off lump sum, that tax would be paid over the annual personal allowance?

Edited February 13, 2020 by HP Mum

[HP Mum]

Update on this  pension issue

 

Filled in and sent off the pension form for friend ages ago

Just got letter asking for more info.

 

They want to know info about spending time overseas.

1) at any time in your life have you worked or lived outside of UK  - Y/N

2) were you born in the uk - Y/N

3) if you were born overseas please tell us where you were born / date you came to live in the uk

4) country you lived or worked in

5) date you lived or worked there - from... to ...

6) foreign security number

 

Please provide as much info as poss as this will allow us to award your full entitlement to State Pension.

 

In answer to these questions - he has always juggled life between 2 countries/ he was born overseas and has overseas passport/ he was educated in uk/ married in uk/ raised kids in uk/ has home in uk.

I am not sure if he ever "worked" overseas - but he did own property/ received rental income. So assume that he would have a foreign security number.  But I do need to check this - as property may have been owned by a company based elsewhere and income subject to different territory taxation??

 

What I want affirmation of/ confirmation of :

if he earned income overseas and had a foreign security number

would he be expected to claim own pension via that country? 

Or because his main residence, most of life, raising kids and late wife were all in the UK he will be ok to still claim his uk pension via late wife's pension?

Edited April 28, 2020 by HP Mum

[HP Mum]

Update on this for friend

 

Amazingly dwp have located a ni number and have confirmed eligibility.  Not for full amount/ week - but he will now get a weekly amount paid monthly in arrears!!

So dwp have paid for this year, to date

 

And advised friend will receive a lump sum back payment from time he came of pension age. About 7y.

 

Dwp haven't yet confirmed eligibility for late wife's % share of her pension.  

But absolutely delighted to have got this far, so far.

Glad to have helped friend

 

Will keep updated on what happens next

[dx100uk]

well done hp

power to your elbow

good investigative work there.

 

 

[HP Mum]

Further update on this:

 

1) DWP have now confirmed eligibility for late wife's pension!! 

Turns out that she hadn't started claiming it.  So 9y of unclaimed State Pension, 98-07, that is now due to friend as either

a) a lump sum payment plus a small weekly bonus (classed as extra State Pension) payment added to his weekly payment

OR 

b) just a slightly higher weekly payment added to his own Pension monthly payment

 

2) DWP have confirmed friend's eligibility for his own unclaimed State Pension, 13-20, that also is due as

a) a lump sum payment

OR

b) a small bonus weekly payment (classed as extra State Pension) on top of his monthly amount.

 

Seems that late wife didn't have a large pension pot - as the extra weekly amount that could be paid to friend is only apx £25/w and the lump sum apx 6k. 

Whilst the lump sum due to him - who didn't even expect to be eligible  - is apx £21k

If friend took both as lump sums I guess he'd have to pay tax??

He has no income presently, so I assume this would be personal allowance tax free and remainder taxed??

 

[honeybee13]

Is your friend a UK taxpayer, HP Mum? I had a feeling you said he's resident somewhere else.

 

HB

[HP Mum]

Hi HB - this is the curious thing - as he didn't think he had a NI # and didn't remember paying tax. 

He has property assets in the UK but earns no income from them. 

He is currently overseas and not earning there either. 

 

 As DWP has now given him his NI # I assume he is on their records for tax purposes. 

But his income would show as 0

 

What does that mean for him with regards to the pension payments - weekly and lump sums - and tax payable?

[honeybee13]

I'm not an expert but I would say it could depend on which country he pays tax to or is resident of/domiciled in, plus whether there's a dual taxation agreement.

 

HB

[HP Mum]

I think he is considered UK resident

[HP Mum]

just to be clear in my mind - is it that he'd pay 20% over and above the current personal allowance of £12.5k?

 

OR

just as an afterthought here - is he allowed 25% tax free?

 

I just did a check on-line and found this Which article:

 

Is the deferred state pension lump sum taxable?

The state pension lump sum is taxable at the rate you are currently paying.  So if you're a basic-rate (20%) taxpayer at the time you come to withdraw the state pension lump sum, you'll be taxed as a basic-rate taxpayer, even if the lump sum you get pushes you into a higher tax bracket. 

The Department for Work and Pensions, will send you a declaration form when you come to claim, where you'll have to say what rate of tax you currently pay. 

HMRC will check this at the end of the tax year, and if too much tax has been deducted you'll get a refund. But if you haven't paid enough tax, you will have to make up the difference. 

It doesn't seem to indicate that deferred 'state pension' lump sums are considered as a withdrawal /eligible for the 25% tax free.  Anyone have knowledge on this?

I also found a pension lump sum withdrawal calculator on Which.  But I am not sure if its the correct tool in this 'basic pension' deferred issue??

 

 

Edited July 21, 2020 by HP Mum

[honeybee13]

I haven't looked at State pensions lately, I thought 25% tax free cash was from a private pension.

 

Does this person live more than six months of the year in the UK? If not, they may not be subject to UK tax.

 

HB

[AndyOrch]

https://www.moneywise.co.uk/pensions/should-i-take-my-deferred-state-pension-lump-sum#:~:text=The principal advantage of taking,a higher income tax bracket.

[HP Mum]

aah - yes that's probably it. 

 

So he will be taxed at 20% on the deferred state pension - IF subject to UK tax.

 

He hasn't been in the UK for quite a while now (that's why I'm helping out) due to serious illness and family issues overseas. 

 

He told me/ gave me his social security # for his overseas location but i don't think he has income / is registered to pay tax there...  Will check

 

Thanks for the link HB

Edited July 21, 2020 by HP Mum

[slick132]

I've not had a chance to research this properly but I'm not sure if the arrears that have accrued would be treated in the same way as a deferred pension, opted for by a pensioner.

[HP Mum]

slick - do you mean that his late wife's pension may not be - or should not be - considered 'deferred' as friend did not know he could inherit it?

[slick132]

Hi HPM,

 

What I'm saying is that, for tax purposes, I'm not sure that arrears (accrued because the pension simply was not claimed when it could/should have been)

would be treated in the same way as a lump sum (paid because a pensioner elected to defer the pension for a later lump sum and higher weekly amount).

 

This concerns YF's own pension, and that of his late wife.

 

I think YF will become "visible" to HMRC and need to fill in tax returns declaring all income including pensions, investment and property income.

 

If he is not living here for more than 6 months of a tax year, the issue of Residency for Tax Purposes may need to be addressed and decided on by HMRC.

[HP Mum]

Just a brief happy update on this

 

Dwp gave 2 lump sum payments: late wife's and his own.

Dwp gave friend the opportunity to split them into different tax years to reduce any tax payable.  So we organized for late wife's to go in last tax year and friend's  to go into current tax year.   This reduced tax liability.    

 

Dwp also now give friend weekly pension (paid monthly) from 2 sources - his and his late wife's pension.

 

Friend received the lump sums recently.

He is delighted.

This took a long time - but we got there. 

(my own life may be a mess but at least something I've tried has gone right!)

Thanks to those who assisted.