Wednesday 7 February 2024: Drowning in red tape and bureaucracy

Image by Thomas from Pixabay

I promise you, I haven’t been playing with my shiny new toy since Monday. No really… although I wish I had been.

Instead, I’ve literally been drowning in red tape and bureaucracy. I wrote that on a friend’s blog today and liked it so much I thought I’d do a whole post about it.

For days, weeks, months, I’ve been trying to manage finance-related issues. Probate for my mom (with my sister). The sale of my mom’s and dad’s house (with my sister). That would usually be sufficient. But I’ve also been juggling pensions and savings and taxes and death benefits…

Fortunately, there is light at the end of the tunnel regarding my mom’s probate. When she passed away last April, it triggered Dad’s bequeaths too, even though he died a few years ago. This is because he had a will and had requested a trust fund to last for Mom’s lifetime. My sister and I had already got it pretty much in good shape, so all we had to do was distribute the funds we had between the beneficiaries.

Mom didn’t have a will. And there were some things we couldn’t change on Dad’s death because she had Alzheimer’s and couldn’t agree to any of it. Only one of those bits of red tape hung around until now and that was to do with the house. We think we’re finally completing on the house next Friday, so all’s good there. But we had to dig up a lot of Dad’s paperwork for Mom’s probate and for the house sale, so it’s been a busy time.

As a result of Mom’s condition, and my father-in-law’s when he died, the poet and I have wills of our own and we’re organising what we call Lasting Powers of Attorney (LPA), one for health and wellbeing each and one for finances. The 4 LPAs are still going through, but the wills are already written and in storage.

If readers take only one thing from today’s blog post, it’s this: Please consider writing wills and setting up LPAs, or whatever is the equivalent in your territory, now while you still have the capacity to do it. The poet (with his dad) and my sister and I have learnt so much in the past few years and now we all have wills and LPAs set up so that our executors or personal representatives don’t have the same problems we did.

Of course, this now means that for the first time in my life I’ll have money I can put aside for a rainy day. So another thing I’ve been doing is making sure what money I do have is working as hard as it can for me until I’m ready to use it. And with another batch just around the corner, I’m making sure it continues to work as hard for me as it can.

Fortunately, interest rates on savings have been favourable recently, but I’m still researching and shopping around for the best deals I can get for the least time.

The third thing I’ve been trying to sort out is my pensions. I have 3 personal pensions and 1 state pension. Two of the personal pensions have grown by a lot more than I thought they would back in the day. The state pension is the biggest, and the other personal pension is worth the other 2 put together.

Two of my personal pensions mature in March of this year and I’ve been busy making sure they have the right name, the right address, and they know what I want them to do with the funds. My other personal pension matures in 5 years, and my state pension matures in 7 years. But in order to get my full state pension I have to ‘buy back’ 8 years’ worth of missing contributions.

And then there’s the poet. He has personal pensions too and we’ve been locating all of the paperwork we can for those too. He has another 2 years before he can probably draw on the personal pensions, and 4 years until he gets his state pension. He’s not that much older than me, only 3 years, but that’s just one thing the government moved the goal posts on in between our respective qualifying years regarding our pensions.

That’s a lot of phone calls between the two of us.

The final thing I’ve been researching has been taxes. We don’t have to pay income tax on inheritance, but we do have to pay income tax on the interest any inheritance earns. We also have to pay income tax on any related death benefits we receive. So today I had a chat with a lovely person at the tax office who told me everything I needed to know and do.

Here’s another thing readers might take away with them: Despite what you think, the tax office is your friend. I’ve never had to pay an accountant because anything I’ve needed to know an officer at the tax office has told me for free. For FREE. And chatting to them on a regular basis has ensured I’m completing my self assessment tax form correctly too.

We have something in this country called an Individual Savings Account (ISA) that allows us to earn a certain amount of interest on our savings without having to pay tax on it. For years and years the interest rates in this country meant it wasn’t worth taking out an ISA. We already have a personal annual allowance of £1,000 interest we don’t have to pay tax on, and that covered most people easily. It still does.

But now that the interest rates have risen (and we expect them to turn the corner quite soon), ISAs are attractive again to more and more people. So another call I made today was to the building society where I have an inactive ISA. There are certain rules surrounding these ISAs that we have to ensure we don’t break, or we’ll lose any tax benefits we had.

I had a chat with the poet on the phone, and we’ve decided to go into the building society at the weekend to make sure they have all the correct information. Then I called the local branch to make sure we don’t need an appointment, and I had another lovely chat with a chap, who made sure I knew what to bring and precisely where to find them. Their door has moved since the last time I was there. And their signage has changed.

It’s still not all done yet, so there’s still a way to go. But at least we’re most of the way there, and I may also start my tax return early this year just to make sure I understand it all fully.

And then, friends, then… we do it all over again with the poet.

I’m not naturally a numbers person. I’m a words person. My dad was a numbers person and he was cute and up on everything. I’d like to think I picked some of that up from him.

But now, I think, chocolate…


5 thoughts on “Wednesday 7 February 2024: Drowning in red tape and bureaucracy

    1. Too much, and all in one go. Although some might say better to get it all over and done with as soon as possible. I do need a break from it now, though. But I can’t yet.

  1. Good for you! Pensions, wills LPAs, ISAs, their all important and now is the time to get organised while young and healthy.

    1. I do love it when you say young and healthy! 😄 I get one of my pensions next month!

      But yes, I think it’s really important to sort it all out before it starts to get too late, or even before it gets too much trouble.

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