Money Worries

[Charlie1986]

Well I never thought once though I would be having worries of this scale,

Ive just been awarded a lump sum which is 6 figures plus a sizeable pension each month for life from injuries sustained from the military.

I have been lucky to been able to carry on employment after my discharge and I enjoy it but my pension will dwarf my wage! this is where my worry is as I have got in to trouble before with not being very money savy I had no savings and a overdraft. And having your annual earning doubled overnight is a big worry for me. Am I being a girl or should I just enjoy it and save for the future

will it be best to seek advice form an IFA?

but for the short term hopefully the S3 prices come down a bit

[Charlie1986]

first world problem

[Charlie1986]

Eric Mc said:

Is self assessment now going to be something you need to be considering?

Hi Eric

Ive been informed that as this a War disablement pension this is tax free and I don't have to do a tax Assessment. This was from HMRC and Veterans agency.

If it was an end of term pension I would pay tax on it and would have to fill a tax return

[Charlie1986]

Eric Mc said:

You are correct. A War Disablement Pension is treated as a Tax Free Benefit - so is not taxed like a normal retirement pension would be.

Are you also in receipt of a normal military pension?

From what you were saying you have received or will be receiving a large six figure lump sum. If you are, I was thinking of the tax implications of any additional income you might receive after you invest this "windfall" amount.

No not in receipt of a normal pension.

My lump sum along with our parents help will mean being able to buy without a mortgage . The rest is being put in a mixture of ISA's and a Santander 1,2,3 account. Even doing this to the maximums allowed we will still be left a considerably large amount. Our household income after tax has went from approx. 30k to over 65k this is why im worried as since my problems from my younger age I budget every month to the annoyance of my OH.

[Charlie1986]

Eric Mc said:

Do you claim Child Benefit?

I believe so for our daughter. But from the wording of the HMRC letter and the information on the veterans agency is that I am entitled to claim as the house hold if receipt of a GIP payment of over 75% will not have a capped on the household for what they were entitled to before the award. There is also a Armed Forces Independence Payment as well which I will receive which is also non taxable.

The woman on the phone was as much use as a chocolate tea pot. whn I ask the questions on what I can do and cant and just repeated its tax free sir

[Charlie1986]

Eric Mc said:

Since tax year 2012/13, if the household income exceeds £60,000, the couple is no longer entitled to receive child benefit. If the income level is between £50,000 and £60,000, then the child benefit amount will be reduced in proportion. If the income level remains at £50,000 or below, then the child benefit will be received in full.

Many people have to pay back any excess child benefit they may have received by completing a Self Assessment tax return and paying back the benefit in the form of a self assessment tax payment.

I have had a quick look on the internet to see if a War Disablement Pension is included when working out the £50,000 - £60,000 threshold amounts for the child benefit restriction. So far, I haven't seen any definitive answers on this.

Eric thanks for your input as always very helpful.

[Charlie1986]

Sarnie said:

+1

Thanks Sarnie. was nearly emailing you this week as we are buying very soon and was needing to sort a mortgage out. We did speak last year and you very helpful in regards to what my situation was with my pension and wage then.

Those what are interested if you look up Myositis Osssificans is the condition I have in my neck from lets just say an ''incident'' from Iraq

[Charlie1986]

Thanks Eric, HMRC confirmed that its taxable earnings so it wont affect it.

Secondly I can highly Recommend Ginge R as he has just given my some invaluable advice for the current future and I will be meeting him in the near future to discuss the long term future

So PH thanks for those who suggested him

[Charlie1986]

This appears as a topic started??

[Charlie1986]

looks like somebody had some mushrooms at lunch!