Defer State pension?

Errata

exil wrote: »

Being even more morbid, a male 65 year old has a 1.5% chance of a meeting with the
Grim Reaper in the next 12 months.

And a 98.5% chance that they won't !

seven-day-weekend

Francesanne wrote: »

Don't want to be gloomy but who knows what's round the next corner. I intend to take my state pension the very minute it's due.

Same here, for the same reason!

buxtonrabbitgreen

KThe government have deferred everyones pensions if you were born after (I think) 1950. So now I have to work till I am 62 and 8 months. So, if I live long enough to collect it I certainly won't be deferring it any longer.

seven-day-weekend

The women's retirement age is increasing gradually from 2010 for all women born after April 5th 1950 until it equals the men's retirement age of 65. Then later everybody's increases gradually up to 68.

http://www.thepensionservice.gov.uk/state-pension/home.asp

Just to add, especially to buxtongreenrabbit, you can retire at any age you like, you just can't get your State Pension until your State Retirement date. If you have a private or Occupational pension you can take earlier there is nothing to stop you retiring then, as people have always done.

Be_Happy

exil wrote: »

Pension is £4716 a year.

You defer paying it for 1 year.

It's increased by 4% to £4904 (a guess but the principle holds whatever)

so - you sacrifice £4716 in one year to gain £188 per year for the remainder
of your life. If you are 65 you have to live another 25 years - ie until age 90 - to
gain from deferring your pension. Even longer if you can invest the £4716 at a rate that beats inflation over the long term.

If the increase for deferment is 5% this comes down to 20 years, and so on

I'm deferring my pension just now on the understanding that it increases 1% for every 5 weeks ie just over 10% a year. Where is all this talk of 4% coming from? Have I missed an announcement that the rate has been reduced?

pollypenny

I retired at the end of the school year following my 60th birthday and deferred for the same reasons as Newly Retired.

My salary plus pension would have put me into 40% tax bracket. However, the gain made at 1% for every 5 weeks deferred made up a full state pension. ( I was short by 2 years)

I took my state pension from 1 Oct, as my final salary, August, was to keep me in September.
( Actually, it paid for our first ever holiday out of school holidays!!:j )

McKneff

Am i right in thinking that if you defer your pension and you die before you
actually take it, the accrued amount (less any tax of course) is paid into your estate?

margaretclare

exil wrote: »

Being even more morbid, a male 65 year old has a 1.5% chance of a meeting with the Grim Reaper in the next 12 months.

And as Errata says, a 98.5% chance that he won't!

I've read (don't know where) that assuming a man attains the age of 65 his life expectancy is very similar to that of a woman the same age, 80+. That means, he has survived all the things that men die of at a younger age - wars, violence, industrial accidents or diseases, heart disease and strokes. These are the things that carry off males before age 65. People of both sexes are living longer than ever before.

exil

-- warning - if you don't like to think about death please skip over this post

---

Well yes.But personally I prefer the idea of using my hard earned cash so I can enjoy my life when still healthy and with all my chairs at home to having a slightly more comfortable nursing home should I live to be 95.

I suppose being only 50 I would say that - but my Dad worked till 64 then had a stroke. The last 5 years of his life are not what I have in mind for my own retirement. FIL had a similar experience, for the last few years before passing away at 70 he barely ventured outside his house. And as we are about to be shown on TV Terry Pratchett got Alzheimer's at 59!

Life expectancy at 65 is 82 for males and 85 for females (see http://www.gad.gov.uk/Demography_Data/Life_Tables/Interim_life_tables.asp). And that's before you actually pass on - you can expect a number of years (on average) of failing health or limiting disability before that happens.

My chance at 50 of reaching my pension age of 60 is only about 94%. Also I've been told by my friendly GP that by 60 I have a 13% chance of a heart attack or stroke (high cholesterol). AND I have had a potentially life-threatening condition already at 50 - turned out to be non-malignant but the fact I had it still significantly affects my life expectancy.

There is a balance to be struck. We shouldn't live and plan our finances as if we will die tomorrow - otherwise we would never bother saving for our old age at all. But I'm inclined to discount any years of healthy life I may be granted by God (if he exists) after I'm 80. If I do live that long in good health it'll be a bonus. I'm sorry if that upsets anyone on here who's reached 80 and beyond and is still enjoying every minute.... but think back to how you felt when you were 50!

Bathman

"Be Happy" is correct in saying that you get 1% extra pension for every 5 weeks that you defer. This amounts to 10.4% per year.
So if you defer 1 year's pension you will lose income in that year of £4716, but your pension will increase by £490 for subsequent years.
That looks like a good deal to me. If you bought an index linked annuity for £4716 you would get less than half that amount.