My spouses pension from Suffolk County Council has suddenly gone down by a big chunk - the reason being that the taxman has caught up with me!
Due to downsizing 4 years ago and interest rates on savings going up a year or so ago I had an extra monthly income from interest from my savings of more than the allowed. It takes ages for the information to get from banks and building societies to HMRC and now a letter tells me I've got to be taxed to pay back what I owe- seemingly all at once - before the new tax year.
Then I got yet another letter from them with details of my new tax code starting April 2025- another different code, estimating what interest income I'll be getting next tax year. Now interest rates on savings are going down anyway so I won't be earning so much on savings. I'm glad I don't have to work it all out myself!
At the same time, in April, State Pensions will be going up, mine to to £848 every 4 weeks which is £11,024 a year. The personal tax free allowance is £12,570. Any income over this, which will be most of my Suffolk County Council Spouses pension (12 payments a year) and the estimated interest is taxed at 20%.
It will be interesting to see, after April, what I will actually end up with each month.
From my accounts I can see exactly where I spend money every month (interesting that all frugal Vloggers say to save money "keep a record of spending" - that something that's been obvious to me for about 40 years!)
The big money spent in 2024 was for the wood flooring, rug, smaller dining table and paint for my living room and the holiday with family, all of them were definitely Not money wasted! The room looks completely different and more up to date and easier to keep clean.
I seem to spend a lot more money than I did just a few years ago on food - and it's not because of all those coffee and cheese scones treats! (and not being able to grow as much as I used to). I don't count the coffees out as a waste - we spent all our married life Not being able to afford to do it so now there's no one here to make me a cuppa it's a real pleasure.
2025 brings an increase in Council tax, electric, water and sewer costs and no doubt food costs too, so it will be important to carry on being careful. I don't want to actually use my savings for day to day living as I'm still thinking I might move again.
I'm not doing frugal month notes now because they were getting repetitive with the same ways of saving pennies every month, but I do still do what I can to save on the boring so I can spend on more interesting things.
Back Soon
Sue
We did our taxes early. We wanted them in before our new president totally messes up the system. We renovated our kitchen in 2024, so I pulled out from my investments. That meant taxes. I overestimated what we would owe at the time, so we will get a refund. Unless Musk messes things up.
ReplyDeleteIn the future, I do not want to over-whithold, in case the IRS can't be trusted. Our financial advisors are running numbers now to see how our savings will hold up. I hoping to not get any unpleasant surprises!
You spend your money wisely, so you have nothing to feel wasteful for!!!
I was actually glad to get the letter as I thought I was going to do a Self assessment form myself which is complicated
DeleteA cuppa and a scone is a real treat, and it is not an extravagance. The large tax bill is a pain, but better now, than being discovered after 10 years!
ReplyDeleteIt's nice to go and people watch with a coffee now and again
DeleteI find it very hard to reduce my outgoings on food, unless I cut out meat. I used to be able to buy tins of cat food, which went a lot further. Sachets have hardly anything in and cost a lot more, even though four cats are a lot cheaper to feed than the 9 we had at Ynyswen.
ReplyDeleteThere are a lot of raised eyebrows (on me!) when I look at food prices. I really miss not having the likes of Chris Thomas locally for fruit and veg. The greengrocer on the market on a Friday seems dearer than M&S! Mince seems to go up almost weekly and the Rapeseed oil that used to be £1.09 before Covid is now £1.99! Covid forced prices up and they never came back down again. Fancy that . . .
Hoping Mr Taxman will refund the £7,000 they took through the Emergency Tax Code they applied to Keith's Army Pension lump sum.
I've certainly not noticed much going down in price - never happens.
DeleteHope the HMRC sort out your over payment, they usually catch up with things.
I agree coffee and scone out isn't a waste. Small treats and social outings on a budget lift spirits and help us cope with the challenges of LIFE!
ReplyDeletePenny
It feels like a real treat to have a coffee out - something we could never afford years ago with three children and a mortgage
DeleteIt must be that time of year because I’ve received a similar letter! Initially I thought it was my coding for next year but no, it was the current year.
ReplyDeleteThe first £1000 of interest is tax free and a few years ago with the rates so low, my interest didn’t come near that.
Thank goodness for the PAYE system though, easier than self-assessment.
J’nan
Also Sue, good for you not being daunted by the possibility of moving again! That would bring me out in a cold sweat.
DeleteI used to fill in self assessment forms when I had the campsite, which was OK as I knew I had to do it so kept good records but now it would have to be online and a real challenge so I'm glad they caught up with me eventually
DeleteIt's good to know exactly what you need to pay and have everything up to date. As we are closing our company down at the end of this financial year, we have already got all our financials in with the accountant and are waiting to find out our VAT and tax liabilities both personal and business. Then, we will be taxed again when we retrieve the money from the company accounts when it closes, it feels like we hand over almost as much as we make sometimes. Like you, I'm glad that I don't have to do all the 'sums' myself.
ReplyDeleteIt was OK doing self assessment when it was on paper and I'd made sure to keep all the paper work ready but glad I don't have to do it now
DeleteAgree it’s a bonus not having to do tax self assessment any more. We’ve just move money ready for the new boiler and bathroom but are still waiting for a date for the work to be done. Coffee and scone is vital for mental health and well-being and definitely part of your food, and entertainment budget. Catriona
ReplyDeleteI shall remember my mental health whenever I have a coffee out!
DeleteI agree with your saving on the boring stuff and spending on the more interesting things of life.
ReplyDeleteIt's getting harder to save anywhere now - but I'll keep a check on the pennies
DeleteIt seems you had no big surprises regarding taxes, only a few changes.
ReplyDeleteI'm still gathering data for the accountant. Some data (1099's) are slow to come. I hope to have everything compiled next week.
Like you, I know my income and costs, so tax time is no big deal....just lots of paperwork.
I'd been waiting and wondering when I would hear something as I knew the interest income was beyond the tax free allowed so it's good to get it sorted
DeleteHaving a coffee and cheese scone out is definitely not a waste - a lovely treat. The thought of moving house again would absolutely fill me with horror - this last move I found hugely stressful and I never want to do it again!
ReplyDeleteI'm not 100% sure on moving, it rather depends if the nearest part of the family decide to move, then I might head nearer the coast again
DeleteOH got walloped with a tax bill too, interest on savings had gone up and of course we sold our old house, bought newer, smaller and cheaper, put that into savings too. Sigh! As he was an accountant in his old life, he just deals with it. Coffee and scone out is not an extravagance, its a necessity. I like to eat out occasionally, its a treat as I'm the only one who cooks in our house. Xx
ReplyDeleteI knew HMRC would catch up with me but it's taken a while so having to pay more tax in a shorter time.
DeleteEating a meal out tends to be with family now as I find it a bit odd on my own but coffee out is fine.