NHS retirement

woohooretiring

I am very confused about the best time to retire,


I am a member of the 1995 scheme and will be 60 late February.
I will have a pension of about £13000 and a lump sum of 39000.
I also have rental income of 12000pa and have maxed my S+S ISA for years.


Currently I am just into 40% tax and put the excess into a Sipp to bring me into the 20% bracket.
My plan is to work half time for the next 2 years before leaving completely.
I am able to retire and return so can I put the equivalent of my lump sum into my SIPP and take a 25% tax free sum ( I could fund that from savings).


Is it best to go at the end if this tax year, a few months into the next or else when is best from a tax efficient point of view?


WHR

kidmugsy

woohooretiring wrote: »

can I put the equivalent of my lump sum into my SIPP

You need to study the rules that constrain recycling of a pension lump sum into pensions.

nigem

You can use savings of 39000 to put into SIPP then use the lump sum to replace the savings I believe.

kidmugsy

nigem wrote: »

You can use savings of 39000 to put into SIPP then use the lump sum to replace the savings I believe.

You take the taxman for a bigger fool than I do.

woohooretiring

I have tried to study the recycling rules, and confused myself even more!
I realise now that the whole lump sum cant be put into the SIPP but I think I can still put some in? and think I can use some of this and next years allowance.


Also if I continue to have an income and don't pay into an NHS pension any more then I cant just pay the equivalent into the SIPP?


Have I got this right?

jem16

woohooretiring wrote: »

I realise now that the whole lump sum cant be put into the SIPP but I think I can still put some in? and think I can use some of this and next years allowance.

You will still be able to make contributions up to 100% of your earned income - note that doesn't include pension or rental income.

gadgetmind

woohooretiring wrote: »

I am able to retire and return

You need to be very careful. I'm no expert, but ISTR a case where someone accidentally worked a few too many hours and had several years of NHS pension reclaimed.

atush

Yes, there is a limit to the number of hours/salary paid by the NHS once you take your pension that you cannot go over. But I dont what the details are.


If I were you, id be thinking of whacking some of those S&S isas into the pension for the this year and the next few so as to get as much into your Sipp as possible.

jem16

gadgetmind wrote: »

You need to be very careful. I'm no expert, but ISTR a case where someone accidentally worked a few too many hours and had several years of NHS pension reclaimed.

Yes - do be careful.

If you are a member of the 1995 Section you will need to take a 24 hours break before returning back to employment and work 16 hours or less per week in the first calendar month to avoid your pension being suspended.

However after that;

If I return to NHS employment after retirement will my benefits be affected?

A. In the NHS Pension Scheme if you are over the normal retirment age (60 for 1995 Section members and 65 for 2008 Section members), then your pension will not be affected if you return to work in the NHS.

All info from here;

http://www.nhsbsa.nhs.uk/Documents/Pensions/Returning_to_work_after_Retirement_factsheet_V2.0_07.2013.pdf

gadgetmind

Of course, you can just work for the NHS via an agency!

woohooretiring

If I were you, id be thinking of whacking some of those S&S isas into the pension for the this year and the next few so as to get as much into your Sipp as possible.





If they are already in tax efficient SS Isa then isn't it better to try and get savings/income into the SIPP firstly?