A U.K. expat I know has 'cashed in' the total amount of his small pension pot (under £50k). He is well under the state pension age but over 55. He has no income from the U.K.

His pension provider has allowed for the 25% tax free portion and deducted tax and national insurance contributions on the remainder after taking into consideration his U.K. personal allowance of £12,500

 

Why has the pension provider deducted N.I.C. ?   I thought pension payments were excluded from N.I.C.

 

Is it because he is under the state pension age so eligible for N.I.C.?

Is it because it's classified as earned income therefore liable?

 

I've done much research on this but cannot find anything that definitely clarifies the situation.

Many financial websites state that there are no N.I.C. deductions on pensions but that is based on people over the state pension age.

I'm looking for a link to show him the facts whether it is right or wrong.

Yes I know it would be easier for him to contact his provider ... Tell him that!

Thanks in advance for any help.

 

 

 

 

 

 

13 minutes ago, Madgee said:

He has no income from the U.K.

His pension provider has allowed for the 25% tax free portion and deducted tax and national insurance contributions on the remainder after taking into consideration his U.K. personal allowance of £12,500

 

Why has the pension provider deducted N.I.C. ?   I thought pension payments were excluded from N.I.C.

 

Thanks in advance for any help.

It maybe it was classed as interest which is classed as earnings he be better off ringing the HMRC.

I had tax & NIC payments taken from my private pension at first and then later I got rebates.

Personally I know nothing or understood what was going on and just let them get on with it. 

The HMRC then sent me a letter informing me of rebates.

Too late now but someone in his position should have used drawdown minimising paying tax