Thanks - silly me - thought it sounded too good to be true

Den Boy I agree with this, the present basic tax free allowance of 6475 is getting no increase this April due to negative inflation which it has always been based on. It's time the allowance was reviewed and decided according to average earnings instead.

Haven't read back on this but wonder if anyone can put me right on this. I work part time at the moment (3 days) if I was to stop work now would the amount I get in pension each month, be less due to being taxed? I'm thinking of giving up but this might make it impossible. I don't have any other income.

Depending on your pension income/savings when you cease working it might be that you would be entitled to some Benefits and my advice would be to either check out things yourself or ask CAB to "run the rule over you" - Benefits wise.

The current situation regarding capitial savings is:

CAPITAL SAVINGS LIMIT (PENSIONERS)

Wef 2 Nov 09 the lower savings limit for Council Tax Benefit, Housing Benefit, and Pension Credit will increase from £6000 to £10,000 for Pensioners.

This will mean a rise in new claimants who were not previously eligible as well as an increase in some existing claimants’ entitlements.

I have just received my PAYE coding notice for next year. HM Revenue & Customs reduced my personal allowance by £45, giving the reason "We have to see if anything should reduce your tax free amount against your other earnings or pensions. We will check at the end of the year that you have paid the right amount of tax." To my mind this translates as "We are taking tax off you even though its not due, in case we've missed something." What a scam! Can this be right/legal? Imagine the reaction next time you are at the checkout of your local supermarket and read at the foot of the till receipt "We are increasing your bill by 'X pounds' in case we've missed something off. We will check at the end of the year."