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    • The stingemeister
    • By The stingemeister 12th Nov 17, 3:36 PM
    • 303Posts
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    The stingemeister
    Logistics of early retirement?
    • #1
    • 12th Nov 17, 3:36 PM
    Logistics of early retirement? 12th Nov 17 at 3:36 PM
    Being mortgage free and with savings I wonder what are the "nuts and bolts" of packing in work completely, but being too young for a state pension? Correct me if I'm wrong but I think with 35 years full contributations its possible to get a full pension once you reach 65-68? What about, say, 10 years of retirement with no national insurance or tax contributions during that time, will you receive a reduced pension because of that?

    Money-wise I believe I can budget the savings ok, and also keep fit.
Page 1
    • The stingemeister
    • By The stingemeister 12th Nov 17, 4:27 PM
    • 303 Posts
    • 31 Thanks
    The stingemeister
    • #2
    • 12th Nov 17, 4:27 PM
    • #2
    • 12th Nov 17, 4:27 PM
    Sorry, think this post would be better in the Pensions and retirement section . Please could someone kindly move it there, don't know how to or whether I can...
    • seven-day-weekend
    • By seven-day-weekend 12th Nov 17, 5:22 PM
    • 29,675 Posts
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    seven-day-weekend
    • #3
    • 12th Nov 17, 5:22 PM
    • #3
    • 12th Nov 17, 5:22 PM
    If you have the full contributions, you will get a full State Pension,even if you don't pay any after taking early retirement.
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • Gers
    • By Gers 13th Nov 17, 10:34 AM
    • 5,905 Posts
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    Gers
    • #4
    • 13th Nov 17, 10:34 AM
    • #4
    • 13th Nov 17, 10:34 AM
    If you have the full contributions, you will get a full State Pension,even if you don't pay any after taking early retirement.
    Originally posted by seven-day-weekend

    Not in every case! I have 47 years full NI contribution but still not entitled to a full SP due to being contracted out for many of those years.

    I stopped working in 2014(my aimed for SP date until the reforms) and then decided to work part time for two years to add enough NI contributions to ensure I will get a full SP.

    Best place is the Pensions board, someone there will also direct you to check the state of your pension on https://www.tax.service.gov.uk/check-your-state-pension

    Planning beforehand is very wise.
    • thepurplepixie
    • By thepurplepixie 13th Nov 17, 10:58 AM
    • 839 Posts
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    thepurplepixie
    • #5
    • 13th Nov 17, 10:58 AM
    • #5
    • 13th Nov 17, 10:58 AM
    Not in every case! I have 47 years full NI contribution but still not entitled to a full SP due to being contracted out for many of those years.

    I stopped working in 2014(my aimed for SP date until the reforms) and then decided to work part time for two years to add enough NI contributions to ensure I will get a full SP.

    Best place is the Pensions board, someone there will also direct you to check the state of your pension on https://www.tax.service.gov.uk/check-your-state-pension

    Planning beforehand is very wise.
    Originally posted by Gers
    Very true, I have 49 years contributions and reach my SRP age within the year and I don't qualify for the full pension on the new scheme due to being contracted out. Fortunately for me on the old pension I get more than the new pension due to S2P and SERPS. Looking forward to the boost in my income as I am basically retired although I have a small online business and do some consulting work.
    • missile
    • By missile 13th Nov 17, 1:31 PM
    • 8,990 Posts
    • 4,365 Thanks
    missile
    • #6
    • 13th Nov 17, 1:31 PM
    • #6
    • 13th Nov 17, 1:31 PM
    It is risky to base your plans on todays state pension, who know what the rules will be in 10 years time?
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • no1catman
    • By no1catman 13th Nov 17, 2:00 PM
    • 2,583 Posts
    • 1,967 Thanks
    no1catman
    • #7
    • 13th Nov 17, 2:00 PM
    • #7
    • 13th Nov 17, 2:00 PM
    I regard my pension as a full one, because of working time, however the level of the enhancements may be different to others as I opted out.

    I retired in Feb., but waited until the start of the next tax year, before taking the State Pension - getting I think another 1% per month in the process.
    I used to work for Tesco - now retired - speciality Clubcard
    • seven-day-weekend
    • By seven-day-weekend 13th Nov 17, 2:03 PM
    • 29,675 Posts
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    seven-day-weekend
    • #8
    • 13th Nov 17, 2:03 PM
    • #8
    • 13th Nov 17, 2:03 PM
    Sorry, I forgot the rules had changed. OP, please ignore what I have said!!
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • lessonlearned
    • By lessonlearned 13th Nov 17, 2:44 PM
    • 10,134 Posts
    • 57,025 Thanks
    lessonlearned
    • #9
    • 13th Nov 17, 2:44 PM
    • #9
    • 13th Nov 17, 2:44 PM
    Perhaps your best bet is to contact the pensions service in Newcastle for a forecast.

    Although as others have pointed out if you have 10 years to go then there could be further government changes before then.
    • alanq
    • By alanq 13th Nov 17, 3:27 PM
    • 3,849 Posts
    • 2,478 Thanks
    alanq
    Sorry, think this post would be better in the Pensions and retirement section . Please could someone kindly move it there, don't know how to or whether I can...
    Originally posted by The stingemeister
    Thread moved from Over 50s Money Saving at OP's request.
    I'm a Board Guide on the Budgeting and Bank Accounts, Savings & Investments, Food Shopping and Over 50s MoneySaving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert .com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    • Linton
    • By Linton 13th Nov 17, 4:37 PM
    • 8,461 Posts
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    Linton
    With 35 years NI contributions whether you get the full new State Pension, or one smaller or larger, depends on the number of years during which you were contracted out which could give you less or contracted-in with relatively high earnings which could give you more.

    You can get apply for a pension forecast online, by phone, or by post - see here.

    If it turns out that you have accrued less than a full state pension you can buy extra NI years after you stop working and before you reach state pension age. Each extra NI year will raise your pension by about £4.50/week until you reach the full amount.
    • thepurplepixie
    • By thepurplepixie 13th Nov 17, 6:49 PM
    • 839 Posts
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    thepurplepixie
    Sorry, I forgot the rules had changed. OP, please ignore what I have said!!
    Originally posted by seven-day-weekend
    To be honest I think alot of people don't understand that not everyone will get the new pension or that some people would be better off under the old scheme. Lots of people have said to me that although I have had to wait longer for my pension at least I will benefit from the higher pension and they are then quite surprised when I say the new pension would lose me money.
    • bigadaj
    • By bigadaj 13th Nov 17, 7:13 PM
    • 10,671 Posts
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    bigadaj
    To be honest I think alot of people don't understand that not everyone will get the new pension or that some people would be better off under the old scheme. Lots of people have said to me that although I have had to wait longer for my pension at least I will benefit from the higher pension and they are then quite surprised when I say the new pension would lose me money.
    Originally posted by thepurplepixie
    No one will lose out, let's be clear on that.

    People will have been better off under the new scheme or the old scheme dependent on their circumstances, but anyone currently will get the higher pension when calculated under the new and old rules.
    • thepurplepixie
    • By thepurplepixie 13th Nov 17, 7:56 PM
    • 839 Posts
    • 1,523 Thanks
    thepurplepixie
    No one will lose out, let's be clear on that.

    People will have been better off under the new scheme or the old scheme dependent on their circumstances, but anyone currently will get the higher pension when calculated under the new and old rules.
    Originally posted by bigadaj
    But some people will get less than the new pension although lots of people think everyone will get the full amount.
    • seven-day-weekend
    • By seven-day-weekend 13th Nov 17, 8:28 PM
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    seven-day-weekend
    I did know not everyone would get the £145 a week, or whatever it is, I had just forgotten.
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • The stingemeister
    • By The stingemeister 13th Nov 17, 9:55 PM
    • 303 Posts
    • 31 Thanks
    The stingemeister
    Forgive my ignorance, what is contracted out mean? Some of the replies (thanks) say they still didn't qualify after many years for a full pension. Is that because of being part time or on a low wage?
    • kidmugsy
    • By kidmugsy 13th Nov 17, 10:12 PM
    • 9,830 Posts
    • 6,620 Thanks
    kidmugsy
    Forgive my ignorance, what is contracted out mean? Some of the replies (thanks) say they still didn't qualify after many years for a full pension. Is that because of being part time or on a low wage?
    Originally posted by The stingemeister
    No it's usually because part of their National Insurance went effectively to buy them a higher Defined Benefit pension (e.g. Final Salary) than they would otherwise have got.

    Some people seem to feel that they ought to get both a higher DB pension and a full state pension. Others understand the trade-off.
    Free the dunston one next time too.
    • bigadaj
    • By bigadaj 13th Nov 17, 10:29 PM
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    • 6,970 Thanks
    bigadaj
    But some people will get less than the new pension although lots of people think everyone will get the full amount.
    Originally posted by thepurplepixie
    Well they shouldn't do.

    Far more people will get the expected amount than was the case for the old system, and the range of potential pension is also less than the old system.

    If you pay in for the defined period under the new system you get the pension amount. Under the old system then people could get £119 or much less, and I think some people were pushing £300 with s2p, SERPS, graduated pension etc depending on their historic level of earnings.

    It will get simpler but it's a long process because it was so complicated.
    • seven-day-weekend
    • By seven-day-weekend 14th Nov 17, 7:12 AM
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    seven-day-weekend
    There always has been a trade-off, hasn't there? I get less State Pension than my friend, who never contracted-out, but my Local Government Pension more than makes up the difference.

    She gets about £150 per week (from State Pensions) and I get about £160 (from State Pension and LG Pension).

    We both qualified under the old scheme in 2010.
    Last edited by seven-day-weekend; 14-11-2017 at 7:14 AM.
    To love someone is to learn the song in their heart and to sing it to them when they have forgotten it
    'I believe in Christianity as I believe that the sun has risen. Not only because I see it, but because I see everything by it': C.S. Lewis
    St. Augustine — 'In essentials, unity; in non-essentials, liberty; in all things, charity.'
    • bostonerimus
    • By bostonerimus 14th Nov 17, 1:50 PM
    • 1,107 Posts
    • 621 Thanks
    bostonerimus
    I have 30 years of voluntary Class 2 NI and 4 years of NI from when I was in Sixth Form College and university. One more year and I'll have 35 years of NI and I'll stop making payments. Under the old system I would have only got the Basic State Pension of around £116/week, but under the new scheme that jumps to new flat rate which is £155/week today. The best thing to do is to get a pension forecast...just google it. That's what I did and it helped in my planning. That will let you know your situation contracted out years and whetehr you can make top up contributions. With that in had you can have a stab at working out how to span the gap between ER and the SP starting. The starting point for that is a detailed budget and list of all your income sources and when they come online....in this Excel is your friend.
    Last edited by bostonerimus; 14-11-2017 at 1:57 PM.
    Misanthrope in search of similar for mutual loathing
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