Money

Pension tracing service
There is an estimated £3 billion languishing in forgotten pensions paid for by millions of people while they were at work. Some of it could be yours.  It may seem strange to forget a pension. But many people work for a company which puts them in the scheme automatically – or they tick a box to join – and then leave after a few years and forget all about it.

Last year the Government’s Pension Tracing Service reunited more than 64,000 people with lost or forgotten pensions. It records of more than 200,000 company and personal pension schemes. To find a lost pension it needs to know where you worked and when. So write down all your employers with rough dates when you worked there and check if you have money sitting waiting to help a bit in retirement?

It is not just pensions at work which are forgotten. Millions of people take out a personal pension and then stop paying in after a few years. It is easy to forget about something you may have paid in for only a short time as long ago as the 1980s or 1990s. Again, write down what you can remember and see if there are any records in a dusty old file tucked in the back of a drawer before you contact the Pension Tracing Service.

You can fill the form in online at direct.gov.uk – put ‘pension tracing’ in the search box. Or you can call 0845 6002 537 or +44 191 215 4491 from abroad.

Remember, it’s your money. And if you don’t claim it the insurance company will keep it.

Revenue sits on your cash
The Revenue has launched yet another attempt to give back an estimated £200 million tax which it has taken off the savings interest earned by non-taxpayers. Tax can be claimed back to 2004/05 – and back to 2003/04 if you get the claim in before the end of January. First, you will need to work out your total income for each of the last six tax years.

Then you have to check if you should have paid tax at all in each tax year. The table shows the maximum income you can have and pay no tax. Use the column showing the age you were in that year. If your income was less than the amount shown for your age and year you should not have paid tax on your savings interest and you can claim it back. For example if you were aged 68 in 2007/08 and your total income was £7,550 or less than no tax is due on your savings interest.

Even if your income was within about £2000 above these amounts you should have been paying tax at half the rate at which tax is automatically deducted. The right hand column shows the excess savings income you can have and pay tax at 10p in the pound on it. If it is within that band you can claim back half the tax deducted. 

You apply to get your tax back on a form called R40. You need a separate form for each tax year. Remember, to get the tax back for 2003/04 you must apply before 31 January 2010.

The Revenue says that refunds should be made within 28 days of receiving the form.

If your income is low enough to pay no tax this year then you can apply to have your interest paid gross without tax deducted in future years. You do that on another form called R85.

Call 0845 366 7850 to get more advice and the forms you need or 0845 980 0645 to register to get your interest paid gross. This Revenue page makes it as clear as it can hmrc.gov.uk/taxback and has an online calculator.

Spending a sovereign?
The gold sovereign was introduced in 1817 and the gold in it was worth exactly £1. And for the next 100 years that is where it stayed. Sovereigns are still made by the Royal Mint but today they sell for £199. The gold alone is worth £155 at today’s prices. But by one of those curious British quirks it emerges that the sovereign is still worth £1! In a deadpan e-mail a Royal Mint spokeswoman says “Sovereigns technically are legal tender and have a face value of £1.’ and adds helpfully “ However, they are intended as collectables rather than ordinary circulation coins and are consequently not found in everyday circulation.” So in theory you can go into a newsagent and instead of pulling out a £1 coin you can buy The Daily Telegraph or The Guardian with a sovereign!

Whether sovereigns are a good investment depends purely on the price of gold. They are not rare as millions were minted every year until 1914. Even Victorian examples can be bought for less than the £199 charged by Royal Mint for a new one. They also make half and quarter sovereigns but the price per gram of gold is a lot higher than for the full sovereign.

Don't die without a will
Most people in married couples or civil partnerships believe that if they die their spouse will inherit their property automatically. But that is not true. When anyone dies without a will complex rules come into play which can leave even married partners in hardship. The rules are even harsher on couples who are not in a marriage or civil partnership. They can end up with nothing even if they have lived together for many years and have children.

The Law Commission for England and Wales wants to change these ancient rules. At the moment a spouse will inherit personal possessions and a house, land or money that is jointly owned. Anything else – including property that is not jointly owned – is then dealt with separately. If they have no children then the first £450,000 goes to the spouse and so does half the rest. The balance is divided among any living parents or siblings. If the couple did have children then only the first £250,000 goes to the survivor. Half the balance is shared equally among the children and the other half is held for them in trust with the survivor able to use it for their lifetime.

The Law Commission wants the survivor to get everything if there are no children. And if there are children it puts forward several alternatives including the survivor getting everything.

But its most radical proposals are reserved for couples who are not married or in civil partnerships. If they have children or have been together for at least five years the Law Commission says they should be treated as if they were married. And if they have been together for between two and five years they should get half what a spouse would get.

Some lawyers though say that no change is needed because unmarried couples already have two simple answers – get married or write a will.

More information: lawcom.gov.uk/current_consultations.htm.

There are no plans to change the law in Scotland, where unmarried partners already have some rights, or in Northern Ireland where the rules are similar to those in England and Wales.

Going, going, Dutch!
Savers in Holland have brought down a bank by withdrawing their money. They took out more than £500 million from the Dutch bank DSB after a campaigner appealed on television for a boycott. Pieter Lakeman, who runs an organisation called the Mortgage Grievances Foundation, told viewers of a Dutch television programme that it was ‘in their interest’ to take their money out. He objected to the bank’s lending policies which he claimed tempted people into unsustainably large debts. Many customers followed his advice and within a couple of weeks the bank failed. However, the majority of savers who did not take their money out have now been left wondering what they will get back. The Dutch compensation scheme guarantees the first €100,000. But customers who had bigger deposits than that will have to wait to see what assets the receivers recover or if the Dutch government will make up the extra, as the UK Government did after the collapse of Icesave, Bradford and Bingley, and Northern Rock.

January 2010