Pensions Planning: The NUMBER

Gatser

gadgetmind wrote: »

And your personal allowance; a lot of people start drawing their private pension long before their state pension kicks in, and you can even defer state pension and play some fun tax tricks when finally drawing it.

Yes, 100% GAD is very limiting. I expect there to be a lot of pressure to return to 120% and/or sever the link to 15 year gilt rates.

Fun Tax Tricks?? Please tell more.....

Back to 120% GAD (or better)? Ohhh YES Please!! :T
Surely if we could draw more out...we would spend more...and help boost the economy? (We certainly are NOT going to just save it!)

gadgetmind

Gatser wrote: »

Fun Tax Tricks?? Please tell more.....

You can defer your state pension and let a backlog accumulate. In the year that you choose to take the accumulated lump sum, it is taxed at your marginal rate but does *not* push you into higher tax brackets. So, if during this year you drawdown below the personal allowance from your private pension, then you will pay zero tax during the year.

72 seems like a good age to me. Draw personal allowance plus five years pension, pay zero tax, and get a few t-shirts printed to tell the world exactly what you're doing!

(And yes, if you snuff it, your rellies do get the back penson so it won't be wasted.)

Surely if we could draw more out...we would spend more...and help boost the economy? (We certainly are NOT going to just save it!)

It is the duty of every blue-blooded Englishman (and woman!) to pay as little tax as is legally possible as this is how we keep our economy thriving.

Whenever I have to write a cheque to the tax man, I hear the sound of distant toilets being flushed over and over to try and dispose of their load of £20s and £50s in as wasteful way as possible. Sorry HMG, I know how to spend my money better than you do!

Gatser

The latest study from Loughborough University:

A couple with two children were said to need to earn a minimum of £18,400 a year each before tax; single people £16,400 a year, while the figure for lone parent with one child is £23,900 and a pensioner couple £12,000 each.

That's pretty close to the last average NUMBER from all your responses.
Looks like we can officially have a socially acceptable existance on £24k pa :T

Gatser

Gatser wrote: »

Fun Tax Tricks?? Please tell more.....

Back to 120% GAD (or better)? Ohhh YES Please!! :T
Surely if we could draw more out...we would spend more...and help boost the economy? (We certainly are NOT going to just save it!)

How rude of me....

THANK YOU, Mr Cameron :beer:

kidmugsy

jingleberry wrote: »

and they get to keep the lump sum after death!

No: "they" pass it to the annuitants who outlive you. Just as they passed to you the leftovers of the annuitants who predeceased you.

marathonic

Gatser wrote: »

The latest study from Loughborough University:

A couple with two children were said to need to earn a minimum of £18,400 a year each before tax; single people £16,400 a year, while the figure for lone parent with one child is £23,900 and a pensioner couple £12,000 each.

That's pretty close to the last average NUMBER from all your responses.
Looks like we can officially have a socially acceptable existance on £24k pa :T

Sounds about right to me. So, in other words, a couple planning for retirement should aim for £12,000 each WHILST opting for the 50% spouses pension option.

This will ensure a reasonably comfortable retirement at £24,000 for the couple and £18,000 for the remaining person when the first passes away.

Gatser

As the months pass by, time to review what our NUMBER needs to be... I now calculate: £28,000 as a more comfortable figure
comprising:
Food £6,000
Car/Transport £5,500
Bills/Utilities £5,000
Hols/Leisure £5,000
Clothing/Cash £4,500
Repairs/Replace £2,000

Are you keeping your NUMBER under tighter control? :cool:

bigchipper

Gatser wrote: »

As the months pass by, time to review what our NUMBER needs to be... I now calculate: £28,000 as a more comfortable figure
comprising:
Food £6,000
Car/Transport £5,500
Bills/Utilities £5,000
Hols/Leisure £5,000
Clothing/Cash £4,500
Repairs/Replace £2,000

Are you keeping your NUMBER under tighter control? :cool:

I take it that this NUMBER is net of tax?

kidmugsy

jingleberry wrote: »

and they get to keep the lump sum after death!

No: annuities work by giving the lump sum to the annuitants who outlived you, just as you got money from those you outlived.

Gatser

bigchipper wrote: »

I take it that this NUMBER is net of tax?

Yes, the NUMBER is how much you will need in "Net Cash" to cover the costs of a comfortable existence.

We just need to get the tax planning part right to maximise our Net Income...