The issue was initially identified back in March 2020, and was due to an administrative error, meaning that a small population of people within the ‘category BL’ element of the state pension had been underpaid. This underpayment had impacts on married women with husbands who reached pensionable age prior to 2008, and who were eligible for an ‘enhanced pension’. This would have increased their state pension payments by anything up to 60%, but these women did not know that they were entitled to the higher amount. The DWP conducted several investigations between May and December 2020, revealing the issue with the underpayments, which meant that tens of thousands of married, divorced and widowed individuals had potentially been underpaid, dating back to as far as 2008.
The repayment programme commenced on 11 January 2021, but the true extent of the issue is not yet known and there is a level of uncertainty surrounding the true cost of the error.
Within the document, it states:
“Our forecast reflects an initial estimate that it will cost around £3 billion over the six years to 2025-26 to address these underpayments, with costs peaking at £0.7 billion in 2021-22.”
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HMRC Pension Schemes Newsletter 128 8 March 2021
HMRC has published the latest Pension Schemes Newsletter – number 128, for March 2021, in order to update stakeholders on the latest news for pension schemes.
This edition includes content relating to:
• Announcements made in the Spring Budget 2021 – annual allowance and lifetime allowance • The extension to the temporary changes to pension processes due to the ongoing impacts of coronavirus • Managing Pension Scheme service – practitioner registration and authorisation features • Relief at source - Scottish Income Tax rates, Welsh Income Tax rates, members residency status for relief at source 2021 to 2022, annual return of information, APSS590 declaration • The consultation relating to the implementation of increasing the normal minimum pension age • Public service pension schemes – changes to the transitional arrangements to the 2015 schemes
Spring Budget 2021
As previously confirmed within the CIPP’s Budget summary, there will be no changes to any of the annual allowance limits.
Additionally, the Government announced that the amount of the pension lifetime allowance for tax years 2021-22 and up to and including 2025-26 will stay at the 2020-21 level of £1,073,100.
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Recognised overseas pension schemes notification list 17 March 2021
The list of Recognised Overseas Pensions Schemes (ROPS) notifications has been updated.
The list is of schemes that have told HMRC they meet the conditions to be a ROPS and have asked to be included on the list.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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