Debt help: Tax mix-up could cost pensioners

09/02/2010

Thousands of older people who began to claim their pension in the 2009/10 tax year may have been given the wrong tax code for April 2010.

For some, the confusion could mean some extra income when they are reimbursed.

But others may have been taxed too little and could need to turn to debt help in order to repay the extra if the error is not sorted out before the tax year begins.

The glitch could also affect married couples and civil partners aged 76 and over, as their married couples allowance may not be processed.

A spokeswoman from HM Revenue & Customs (HMRC) said: "We accept and very much regret that errors have occurred in some of the notices that have issued but the majority of codes are right.

"We recognise that some of the data brought forward from previous systems may be inaccurate and we are taking every opportunity to correct that."

HMRC warned that it doesn't know how many people have been affected.

"Our data suggests that the older generations are really struggling to keep on top of finances as their income has dropped and cost of living has risen" said Kevin Still of debt solutions specialists, EuroDebt.

"So this is not good news. The figures for debt in the over 60s have gone up quite considerably since the recession really took hold."

Posted by Fiona Smith

Tags; Retirement Money Problems,

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