DEAR TRICIA
Need some practical financial advice? YOUR MONEY Editor Tricia Phillips and her team can help
Q If I have an old defined benefit pension and carry on working, will I still be hit with the annual allowance cap of only being able to save £4,000 into my current pension? A No, only if you have taken flexible benefits which include income, such as an ‘Uncrystallised Funds Pension Lump Sum (UFPLS)’ or flexiaccess drawdown with income, and you want to continue paying contributions to a defined contribution pension scheme. If you transfer it and take benefits, then potentially, yes. Q I am a non-taxpayer and confused about the £1,000 Personal Savings Allowance. If my savings interest goes over £1,000 in a tax year will I still have to pay tax? A You can use your Personal Tax Allowance to earn interest tax-free too. Therefore, if you haven’t used it up on wages, pension or other income you can offset savings interest against it. Q I’m retiring in March and have a lot of small pensions, and a company pension. I am thinking of taking all the monies out of the company pension. Will I still get a tax-free amount, which I would be entitled to if I had a monthly pension paid? A If you transfer the company scheme to a personal pension or SIPP, then you will be entitled to 25% tax-free cash, and any remainder over the annual personal tax allowance taken as either income
or lump sum will be taxed at your marginal rate. Q
I was in hospital and missed a payment on my credit card – the first time ever. I have noticed that it has been recorded on my credit report. Is there anything I can do to get this removed? It seems very unfair as I have always paid all my bills on time for my whole life. A
As far as I’m aware, there is nothing you can do. However, only one missed payment shouldn’t really have a significant detrimental effect on your
credit score, or your ability to gain or apply for any new credit, if it was otherwise good. Q I have various savings accounts including ISAs with one provider and the rates seem quite low. Can I get a better return elsewhere? A
Quite possibly. Although without knowing the interest rates you are currently getting, I can’t say for sure. Online rates are usually slightly better than high street rates if you’re comfortable saving and/or investing this way.