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Post by lesleysm2 on Sept 2, 2023 22:47:27 GMT
Okay I am hoping for sensible advice here but I am sure some of you have passed the pension age
Come November I'm 66 and can claim my state pension I don't have a private pension so my original plan at the start of this year was to claim it and keep working after all at 65 the best I could expect was short term contract/temp work so if I was working I'd pay tax on it but if not well there would be money for food etc. I mean what employer in their right mind is going to give a 65-year old a permanent contract?
Oh wait one did and I am so happy there I have to pinch myself from time to time to remind myself I am not dreaming
So I was thinking I'd defer my pension, not pay NI and get a bit extra when I did retire one of my friends has done this and reckons he's a bit better off and in his case not only when the time comes to retire will he get extra but because he has a very generous pension (he works for a local council) hes also adding to that
Another friend of mine who is in pretty much the same boat as me just claimed her pension but is going to keep working she has found out the tax on her wages and pension is cancelled out by not paying NI so her monthly salary is a bit less but her pension makes her a lot better off so now I am leaning that way
Worked out if I work another 5 years my enhanced pension is 35% more than the basic pension but in the meantime assuming my state pension is £800 a month I've just been seriously ripped off because the saving by not paying NI is about £1600 a year
And there is the practicalities to consider:
1. If I die before I claim the enhanced pension then all those years of paying NI are wasted
2. I don't know what the future will bring I am damn sure I won't get sacked where I am now but there could be a restructure and my job could no longer exist or perhaps I develop health problems and can't work then in either case if I have my state pension in place so I don't have to wait for it to get sorted and as I say at very least there will be a bit of money for food etc
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Post by spinno on Sept 3, 2023 6:26:02 GMT
We aren't pension advisers so we can't offer advice, it's against the law.
However we can offer our narratives.
The tax was Mrs S's consideration as she was in a reasonably well paid job.
If you have a yearly contract see how you feel in 6 months time.
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Post by kate on Sept 3, 2023 6:43:27 GMT
I speak from personal experience of having been in a similar situation once.
I took my pension at pension age but continued working. Since my pay was good, I saved every penny of those pension payments for 3 years before I took retirement. With not paying NI, I can't say I noticed much difference in my pay at the end of the month.
I felt it was worth it as I had a nest egg at the end of those three years.
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Post by zx9 on Sept 3, 2023 9:17:06 GMT
Okay I am hoping for sensible advice here but I am sure some of you have passed the pension age Come November I'm 66 and can claim my state pension I don't have a private pension so my original plan at the start of this year was to claim it and keep working after all at 65 the best I could expect was short term contract/temp work so if I was working I'd pay tax on it but if not well there would be money for food etc. I mean what employer in their right mind is going to give a 65-year old a permanent contract? Oh wait one did and I am so happy there I have to pinch myself from time to time to remind myself I am not dreaming So I was thinking I'd defer my pension, not pay NI and get a bit extra when I did retire one of my friends has done this and reckons he's a bit better off and in his case not only when the time comes to retire will he get extra but because he has a very generous pension (he works for a local council) hes also adding to that Another friend of mine who is in pretty much the same boat as me just claimed her pension but is going to keep working she has found out the tax on her wages and pension is cancelled out by not paying NI so her monthly salary is a bit less but her pension makes her a lot better off so now I am leaning that way Worked out if I work another 5 years my enhanced pension is 35% more than the basic pension but in the meantime assuming my state pension is £800 a month I've just been seriously ripped off because the saving by not paying NI is about £1600 a year And there is the practicalities to consider: 1. If I die before I claim the enhanced pension then all those years of paying NI are wasted 2. I don't know what the future will bring I am damn sure I won't get sacked where I am now but there could be a restructure and my job could no longer exist or perhaps I develop health problems and can't work then in either case if I have my state pension in place so I don't have to wait for it to get sorted and as I say at very least there will be a bit of money for food etc You have ten years on me but I have recently been doing the calculations as they appertain to me, for me the crux was did I have the minimum number of years contributions needed for a full state pension when I eventually reach 67. The answer was I still need to work until I am 60 for that entitlement, that is the only advise I can give - check how many years NI contributions you have made and possibly consider buying missing years if necessary and you can afford to do so.
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Post by JohnY on Sept 3, 2023 11:18:04 GMT
The considerations are not just financial. Consider quality of life. Do you enjoy your job? What will you do when you retire?
Of the financial considerations something you have not mentioned are possible benefits. Since you do not have any private pension and may not have much in the way of savings you may be eligible for benefits. Consider everything.
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Post by don on Sept 3, 2023 12:45:15 GMT
Sorry Lesley I just started my pension so I’m no help whatsoever
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Post by willien on Sept 3, 2023 13:03:41 GMT
Okay I am hoping for sensible advice here but I am sure some of you have passed the pension age Come November I'm 66 and can claim my state pension I don't have a private pension so my original plan at the start of this year was to claim it and keep working after all at 65 the best I could expect was short term contract/temp work so if I was working I'd pay tax on it but if not well there would be money for food etc. I mean what employer in their right mind is going to give a 65-year old a permanent contract? Oh wait one did and I am so happy there I have to pinch myself from time to time to remind myself I am not dreaming So I was thinking I'd defer my pension, not pay NI and get a bit extra when I did retire one of my friends has done this and reckons he's a bit better off and in his case not only when the time comes to retire will he get extra but because he has a very generous pension (he works for a local council) hes also adding to that Another friend of mine who is in pretty much the same boat as me just claimed her pension but is going to keep working she has found out the tax on her wages and pension is cancelled out by not paying NI so her monthly salary is a bit less but her pension makes her a lot better off so now I am leaning that way Worked out if I work another 5 years my enhanced pension is 35% more than the basic pension but in the meantime assuming my state pension is £800 a month I've just been seriously ripped off because the saving by not paying NI is about £1600 a yearAnd there is the practicalities to consider: 1. If I die before I claim the enhanced pension then all those years of paying NI are wasted 2. I don't know what the future will bring I am damn sure I won't get sacked where I am now but there could be a restructure and my job could no longer exist or perhaps I develop health problems and can't work then in either case if I have my state pension in place so I don't have to wait for it to get sorted and as I say at very least there will be a bit of money for food etc Not sure what you mean by being ripped off with NI. My understanding is that you stop paying NI when you hit the state pension age - there is a slight complication for the self employed.
My personal feeling is that living off the state pension without some level of nest egg could be fraught.
The new Gvt advice service on the pensions is:-
They should be able to advise if any benefits would be available to you as well as as more general advice.
Two things I did not realise before I retired:- 1. The state pension is paid 4 weekly not monthly. 2. Income tax is not deducted from the state pension. It is paid tax free but one's personal allowance tax code is reduced accordingly so any other sources of income are subject to more tax than they previously were.
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Post by aitch on Sept 3, 2023 13:14:12 GMT
Two things I did not realise before I retired:- 1. The state pension is paid 4 weekly not monthly. 2. Income tax is not deducted from the state pension. It is paid tax free but one's personal allowance tax code is reduced accordingly so any other sources of income are subject to more tax than they previously were.
1. Yep. Last month I got two payments. Useful as my PC died last month.  2. OK if you have a competent company pension administrator and fortunately I do. Also fortunately(?), the full state pension is well under the Personal Allowance...
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Post by andy on Sept 3, 2023 14:56:20 GMT
2. I don't know what the future will bring I am damn sure I won't get sacked where I am now but there could be a restructure and my job could no longer exist or perhaps I develop health problems and can't work then in either case if I have my state pension in place so I don't have to wait for it to get sorted and as I say at very least there will be a bit of money for food etc If you get sick would you get sick pay? Or universal credit? How does it work with rent if you don't mind me asking? |
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Post by kate on Sept 3, 2023 16:07:58 GMT
It's all a gamble against your life expectancy too! I must admit to being surprised I'm still around.
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Post by willien on Sept 3, 2023 16:17:59 GMT
It's all a gamble against your life expectancy too! I must admit to being surprised I'm still around. Pensions decisions would be much easier if we were on fixed term lives. |
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Post by dreampolice on Sept 3, 2023 17:09:09 GMT
It's all a gamble against your life expectancy too! I must admit to being surprised I'm still around. I knew someone who was an actuary who once talked at me about it all. one of the most boring people you could ever wish to know. |
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Post by Ivor E Tower on Sept 3, 2023 17:14:58 GMT
You no longer have to pay NI when you reach pensionable age, so make sure if you carry on working that your employer stops deducting NI at the appropriate time.
NI is not a "rip-off" if you die early (although it will feel that way) as it also funds the NHS, access to your GP etc as well as pension payments.
Form my mum's experience, when you reach pensionable age your tax code is adjusted so that account is taken of your pension as income - if you take the pension. The real question about taking the pension as soon as you can or deferring and getting a higher pension later is..... how long will you live, and will it be financially worth delaying taking the pension, and that is a question that none of us can answer (about you or about ourselves).
You would have to look at how much more pension you get if you defer, also if you do retire and take your pension now, how much would you get and will it be enough. If not, what benefits are available to top up your income? I believe that there is a government site where you can check what your pension payments will be if you retire as soon as you reach pensionable age, and you should receive notification of this from the government in advance of reaching pensionable age.
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Post by willien on Sept 3, 2023 17:24:57 GMT
It's all a gamble against your life expectancy too! I must admit to being surprised I'm still around. I knew someone who was an actuary who once talked at me about it all. one of the most boring people you could ever wish to know. Actuaries are people who found the prospect of an accountancy career far too stimulating. |
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Post by peterba on Sept 3, 2023 18:46:48 GMT
I must admit to being surprised I'm still around.
The rest of us aren't!   |
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