Pension Boosting article discussion

mark55man

gadgetmind

I have three small business started up (2 now closed) but didn't come to anything - mainly did it for the interest, so I could put director on my CV, and just in case any of hare brained internet schemes came to anything. However I didn't think you could use it for other tax benefits

My OH and I are both working and in jobs that count towards our contribution years - is there any other benefits we should be squeezing out of the £15 p.a cost of running a company - bit off topic for the board so maybe anything pension related first, and then a few others for luck

harryhound

Do you mean a self employed business or a limited company?

I would have thought the latter would cost more than £15 a year to keep it alive.

mark55man

limited company, but not active, so its just doing the accounts (myself) for £15. interested in answers from any perspective

innit

Does anyone know how salary sacrifice works regarding reduced national insurance.My company is introducing a salary sacrifice scheme to increase my take home pay,i have been paying national insurance for 26 years and expect to retire at age 58 with 40 years in my final salary pension scheme,will i have paid enough in?

monxton

My state pension date is after 2016. I am no longer working, and fortunately I >just< have 35 years-worth of contributions. I say fortunately because when I stopped working the requirement was only 30 years and the increase to 35 was not anticipated.

For nearly all the time I was contributing, I was contracted-out, and paying into an occupational pension. As I understand it, that means that my state pension will only be at what is effectively the current rate of approx £110, not the new flat rate of £140.

I know the new process is not well-defined, but is it likely that there will be a way to boost my state pension to the new rate?

It's a pity for me that I have many years of receiving child benefit, which would qualify me for the new rate, but because I was at the same time working and paying contracted-out NI contributions, my home responsibilities are not taken into account.

scoobie25

Sorry posted in wrong place

scoobie25

Deferring your pension may result in you having to pay tax when you actually retire and start claiming it, as you will be taxed on any income above your personal allowance which at the moment stands at £10,500. This will be at a time when you can least afford it. You will also not be entitled to any benefits because you will be receiving above the threshold. So be warned!

hugheskevi

Deferring your pension may result in you having to pay tax when you actually retire and start claiming it, as you will be taxed on any income above your personal allowance which at the moment stands at £10,500.

Personal Allowance is £9,440 for those reaching age 65 now, rising to £10,000 next financial year (aka 'Granny Tax').

This will be at a time when you can least afford it.

I'd be able to afford more if I had an income of £11,000 and paid a small amount tax than a tax-free £10,000.

You will also not be entitled to any benefits because you will be receiving above the threshold.

Entitlement to means-tested benefits is not linked to tax-thresholds.

jamesd

monxton, you will be able to pay additional years to increase your entitlement to the flat rate state pension. In addition you will keep the income from the contracted out pension pot.

I'm unsure what you mean by your mention of home responsibilities protection and contracting out while working. Each year contracted out counts as a year for the flat rate pension, just as it does today for the basic state pension. Maybe you thought that contracted out years didn't count towards the 30 or 25 year total? They do.

Contracting out affects the additional state pension portion, not the basic state pension part. The flat rate plan is to combine the basic and additional parts, reducing the state pension for those who work a full life from perhaps £190 a week to £144 and using their money to pay for those who don't get as much as £144, thus reducing the means tested benefits bill via sleight of hand. Those retiring soon get transitional protection, the cuts are for those who do much of their working life under the new system.

kwikbreaks

Apologies if this was asked before as it surely must have been in this huge thread but...

Both my wife and myself have state retirement dates in 2014 which is before the new flat rate will be introduced. We both have at least 30 years contributions and will be due ~ £110 pensions (I have pulled down pension estimates from the website but don't have them to hand right now) If we deferred our state pensions until the new flat rate is introduced would we get that or would it be the £110 + deferral increase?

I will obviously be calling the pension people for confirmation of my options nearer the time but would be interested to know if anybody has been through this already

TIA