“Can you explain the difference in the state pension and the new state pension? I thought we’d receive the same!”


It depends on when you reach state pension age. People who reached it on 6 April 2016 or later get the new state pension. People who reached it before that date get the old state pension, usually called the basic state pension. The difference is large: the full rate of the new state pension is £179.60 a week, but the old state pension is just £137.60 a week, which is nearly £2,200 a year less. The gap grows yearly as they both rise by the same percentage. That increase will be 3.1% in April, widening the gap to £43.30 a week — more than £2,250 a year.

Note that some on the old pension get more than the basic, as it includes an earnings-related element called SERPS. And some on the new pension get less than the full amount as some may be deducted if they have a good company pension.

Why the change? The new pension is simpler — and will cost the Government less than the old one.

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Lost track of your old savings account?

John asked me: “I have a building society book from 1994 showing a balance of more than £30k. The bank that now owns it says it was closed in 1997 and they do not keep records that far back. Can I resolve this?”

A passbook is not proof of what is in an account. They were largely phased out in the 1990s and when the account was closed, money would normally have been taken out of it.

You can, however, find a lost account at mylostaccount.org.uk, which holds details of millions of accounts with 30 banks and all 43 building societies. It has all the details of takeovers and mergers for firms that no longer exist. The service is free. If an account is found, you will have to contact the bank or building society directly. If, like John, you run into a brick wall, then make a formal complaint to the firm and, if not resolved, take it to the Financial Ombudsman Service. Again, see mylostaccount.org.uk, or financial-ombudsman.org.uk.

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Do I have to pay tax on my company shares?

Barry, who has been retired some years, wrote: “When I was working I bought shares in the company via the sharesave scheme. If I sold them now, how would capital gains tax be calculated?”

Employees pay a regular amount into a sharesave scheme from their pay. Schemes last three or five years, and at the end the employee can buy shares in the company at a price fixed at the start of the scheme. If the price has fallen they can just take their money back as cash. If it has risen they can buy and sell them in one go, keeping the profit. Or, as Barry did, keep he shares and sell them later.

When you sell shares, the difference between the price you paid and what you sell them for is taxable. But every year you’re allowed total gains of £12,300 before any capital gains tax is due. If your profit from selling the shares takes you over that amount, you’ll pay ten per cent tax on the excess, or 20 per cent for higher rate taxpayers. If you can’t recall what you paid, ask the company or search online. If that doesn’t work, ask an accountant to access the data.

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