Seeking Pension advice for my Mother :)

PJD

Hi,

my Mum is 59, - she intends to work until she is 65. She will be only getting a reduced pension which is estimated at £49 a week. She is divorced, & living on her own.

She now has two options:

#1 Take the pension when she is 60 which will also mean she won't then be paying NI, and then save that money.

or

#2 Opt to take the pension at 65 & therefore get a slightly bigger pension.

???

Any help very much appreciated

dunstonh

Which option is best for her finances?

Garnet_Gem

Without knowing the technical stuff I would opt for the pension now and save it. On the other hand maybe she should spend it and enjoy life. Who knows how long we've got? Pension credit will be available for her if she needs it.

PJD

dunstonh wrote: »

Which option is best for her finances?

I just asked her, - she said it depends on how much more money she would get at 65? How much extra pension would paying stamp for a further 5 years give her?

EdInvestor

I don't think she will be required to pay NI after aged 60 will she?

How much state pension will she get at 60?

https://www.thepensionservice.gov.uk for a forecast.

The more important area to look at might be the tax situation, with both pensions.

Be_Happy

Sounds as if your mother is talking about 'deferring her pension', something which I've just had to consider.

Firstly, she will stop paying NI contributions at 60 whether or not she is working or drawing/not drawing her pension.

Secondly if she postpones drawing her pension at age 60, it will increase by 1% for every 5 weeks she waits, ie 10.2% a year. There is also the option of taking a lump sum instead of the increases.

As others have said, get an up-to-date forecast of what pension will be. This can be done on the internet.

PJD

thankyou very much for your help, - that's great. Forecast of what the pension will be is the next top.

Cheers!

jamesd

Do come back once you have the pension forecast results - we'll be able to make more useful comments then about what's best.

If it's a work pension, does it also offer the option of a lump sum for part of the money? How much? How's her health (life expectancy)? No need to answer now, the answers can't really be used until the state pension numbers are in.

If she's curious she can phone the state pension people after getting the forecast and they can tell her how much her income on which NI was paid was for each year.

PJD

Thanks very much, - yeah, i'll report back here when she gets her finger out