Latest news with #over55s
The Independent
23-05-2025
- General
- The Independent
Residents at over-55s block of flats left ‘trapped' after lift broken for nine weeks
A pensioner living in a block of flats for over-55s has said she was left 'trapped' and 'isolated' after the building's lift was broken for nine weeks. Myra Hunter, aged 73, said many of her fellow residents at Citadel Court in Plymouth are in their 80s and 90s and were unable to use the stairs after the lift broke in February. Describing the lift as a 'vital part of living in the block', Ms Hunter – who lives on the fourth floor – told the BBC it was 'not acceptable' that it had been broken for so long. Sanctuary Housing, which runs the block of 38 flats, apologised for the disruption in a statement, and blamed the delay in fixing the lift on difficulties sourcing the specialist parts required. The lift was fixed on 23 April, said a spokesperson for Sanctuary, a housing association which provides accommodation and care for around a quarter of a million people in across England and Scotland, according to its website. Describing the situation in recent months as worse than the Covid lockdown, Ms Hunter said: 'To stay in because you can't get down the stairs from your apartment, it's really not good.' Warning that one of her neighbours had been left unable to visit his wife who lives in care, Ms Hunter added: 'When you come here at 55, you don't anticipate being disabled. But, as age catches up with you, you need that lift.' Ms Hunter said she and her seven-year-old granddaughter also got stuck in the lift for around 10 minutes in February after it broke down before being freed by a manager at the building, which was built in 1987. The resident told the BBC she felt nervous about using the lift because of a 'constant worry' that it might break down. A spokesperson for Sanctuary said: 'The lift at Citadel Court was restored on Wednesday 23 April. 'The availability of the specialist parts required meant it took longer than expected to complete the repairs and we are sorry for the disruption and inconvenience this has caused residents.'
Telegraph
13-05-2025
- Business
- Telegraph
This £1 pension trick could save you thousands in emergency tax
During the first three months of 2025, over-55s have been forced to reclaim a staggering £44m in overpaid tax on their pension withdrawals, with more than 15,000 pension savers submitting claims to HMRC worth an average of £2,881. The emergency tax had been charged on certain flexible pension withdrawals, often landing savers with an unexpected charge that can take months to get back. In some cases, savers needed to reclaim much more. A Freedom of Information request from Royal London last year found that in the 2022-23 tax year there were 2,300 claims worth more than £10,000. No one wants to be needlessly out of pocket, but by taking advantage of the so-called '£1 HMRC pension trick', it might be possible to avoid the hassle of a hefty emergency tax bill. Here, Telegraph Money explains what you need to know about emergency tax on pension withdrawals, and the steps you can take to avoid it. Why is emergency tax charged on pension withdrawals? The pension tax process How the £1 trick works Plan ahead to avoid emergency tax Why is emergency tax charged on pension withdrawals? Following the introduction of the pension freedoms in 2015, it's possible to make flexible withdrawals from your pension once you turn 55 (rising to 57 in 2028). The first 25pc is paid tax-free, and the remainder is added to your income for the year and taxed at your highest rate. However, as this withdrawal will come as something of a 'surprise' to HMRC, emergency tax will normally be applied, meaning you will end up paying more tax than you owe. David Gibb, chartered financial planner at Quilter Cheviot, said: 'When someone makes their first flexible pension withdrawal, HMRC may apply emergency tax, assuming it's a monthly payment rather than a one-off lump sum. This happens because HMRC doesn't yet have an up-to-date tax code for the individual's pension provider, meaning they default to a higher estimated rate due to a quirk in how the PAYE system works.' Helen Morrissey, pensions and retirement spokesman at Hargreaves Lansdown, explained how emergency tax is calculated: 'When you're taxed on an emergency basis you're treated as though the same amount will be taken on a monthly basis – it doesn't take into account that this payment is a one-off. 'As a result, the income tax payment is calculated using a twelfth of your personal allowance, a twelfth of your basic-rate tax allowance and twelfth of your higher-rate allowance. The remainder will be taxed at additional tax rates, so they are paying tax at much higher rates than they ordinarily would.' This can be particularly problematic if you are cashing in a whole pension or withdrawing a lump sum. According to calculations from Hargreaves Lansdown, it would land a saver making a £20,000 withdrawal with an emergency tax charge of £7,379. However, assuming the saver paid basic-rate tax, they should only need to pay £1,484. Ms Morrissey added: 'The excess tax can be reclaimed by filling out a form, but being taxed in this way can take a significant chunk out of the money you were expecting to receive, [which] could cause you financial hardship or mean you have to change your plans.' The pension tax process Tom Selby, director of public policy at AJ Bell, described the taxation of pensions as 'outdated'. 'We have only just blown out the candles on the cake celebrating 10 years of pensions freedoms. It is simply unacceptable that, after all this time, the Government has still not managed to adapt the tax system to cope with the fact Britons are able to access their pensions flexibly from age 55, instead persisting with an arcane approach which hits people with an unfair tax bill, often running into thousands of pounds, and requires them to fill in one of three forms if they want to get their money back within 30 days.' Since April 2025, the Government has made changes to the tax code process to ensure people taking regular income out of their pension get issued with the correct code faster. However, it still won't help those making one-off withdrawals. How the £1 pension trick works Clare Moffat, pensions expert at Royal London, says that one way you can avoid an emergency tax a charge is to take a notional amount out of your pension first, to trigger a tax code from HMRC. Then, once this is issued you can withdraw the amount you actually need, which should be taxed at the appropriate rate. Theoretically, this notional amount could be as little as £1, as there is no legislative minimum pension withdrawal. 'How much you would need to take out would depend on your provider, so you need to check with them first. But even if you can't take £1 out, taking out £100 may still be enough to generate a tax code from HMRC that the provider can apply,' she said. Many of the main pension providers will accept requests to withdraw £1, but may require you to submit a paper request for such a small amount – therefore, it's best to check what each provider's rules are in advance. Mr Gibb added: 'While this trick can work well, it's not 100pc foolproof, and some individuals may still need to submit a tax reclaim form (P55, P53 or P50Z) to HMRC if excess tax is deducted. Nevertheless, it can significantly reduce the hassle of reclaiming large amounts later.' Plan ahead to avoid emergency tax – but always think first Ms Moffat said it's a big help for savers if they are aware of emergency tax on pension withdrawals. 'A little bit of forward planning means they can save waiting for that tax money. They can go on that holiday or buy that new kitchen.' However, she also added that it's important to think about making any taxable withdrawal from your pension carefully, especially if you're still relatively young and yet to retire. Aside from the fact that you're reducing your future retirement income, you could also trigger the money purchase annual allowance (MPAA). This will see the tax-free amount you can pay into your pension – including employer contributions – fall from a maximum of £60,000 a year to just £10,000. 'That might seem like a lot, but people in their 50s are often paying the most into their pensions and may have stopped paying their mortgage,' she said. As such, if you're thinking about taking any money out of your pension, it's a good idea to talk to an expert. Ms Moffat said: 'Financial advice is the gold standard, but it's not always practical with small pots. Everyone [over 50] can book an appointment with Pension Wise, though. It won't be personalised – it's just guidance – but it can still help.' Can't I take a tax-free lump sum out of my pension? It is possible to take 25pc of your pension as a tax-free lump sum. This can be done in one go, or in chunks. However, you can only take lump sums tax-free when you 'crystallise' your pot by moving funds into income drawdown or buying an annuity. If you make a flexible withdrawal without crystallising your fund, only 25pc of your withdrawal will be paid tax-free.
