Claiming State Pension while still working

saver861

jamesd wrote: »

She has a state pension entitlement of her own. even if she didn't, she could inherit even if she didn't meet the minimum number of years requirement, see paragraph 31.

The OP has now confirmed she has a full state pension - and yes she still could inherit the extra pension and a portion of the additional pension. However she would not be able to inherit any of the basic pension - at least thats been my understanding.

She could inherit some of her spouses basic pension to make up her own years if she did not have the full years required.

jamesd

This is a discussion about inheriting the extra state pension from deferring. Inheriting his basic state pension doesn't matter. She'll still inherit the increase in basic state pension from deferring.

Bettie

Just_caring wrote: »

My husband will be 65 in October and still works full time (self employed) we cant decide if its worth deferring his state pension (someone has said he needs to live till aged 87 to recoup the money if we defer) or take it and save it our selves.
He does not claim any state benefits and is unlikely too in the near future as we have own our home, have savings and both have small personal pensions which we have not taken yet.
I do not work but do not claim any benefits I will not reach state pension aged until 2023.


My feeling is to take it and save it ourselves.


Any advice appreciated. Thanks

I have deferred and because of my circumstances I will take it as a lump sum the year after I finish working. That way I will pay no tax on it. They are paying interest on the deferred pension ( not sure how much)

kidmugsy

Bettie wrote: »

They are paying interest on the deferred pension ( not sure how much)

2% p.a. above Bank of England, so currently 2.5% p.a. Better than the average Cash ISA at the moment.

LindaQ60

I am in a similar position to you & your husband. As you are not due to retire until 2023 you need to consider what will happen to your husbands deferred pension if he dies before you. It will not automatically be payable to you until you are entitled to claim your own retirement pension. I had assumed that any accumulated pension would be part of my husbands estate but apparently this is not the case. I have double checked this today with the Pensions Advisory Service as I found it to be totally unbelievable. As I am four years younger than my husband, if he was to defer his pension now and then died three years later there would be approximately £20,000 sitting in the governments coffers that I would not be able to claim until I became entitled to state pension in 2019. How can this be right ? I don't think enough people are aware of this situation.

atush

Bettie wrote: »

I have deferred and because of my circumstances I will take it as a lump sum the year after I finish working. That way I will pay no tax on it. They are paying interest on the deferred pension ( not sure how much)

State pension or other pension?

While you pay tax (if you earn above your PA- many dont) on your increased SP after deferral, it also increases each year. Which the LS wont do. After all, you could live 30 years or more?

Alter_ego

Bettie wrote: »

I have deferred and because of my circumstances I will take it as a lump sum the year after I finish working. That way I will pay no tax on it. They are paying interest on the deferred pension ( not sure how much)

If you are claiming the lump sum and your state pension in the same year, you will need careful timing to avoid paying tax on it.

Bettie

atush wrote: »

State pension or other pension?

While you pay tax (if you earn above your PA- many dont) on your increased SP after deferral, it also increases each year. Which the LS wont do. After all, you could live 30 years or more?

state pension.
I guess it's a gamble. Maybe in a year or two I will change my mind depending on how healthy I feel!
the lump sum would attract some interest so there will be a slight increase.

Bettie

Alter_ego wrote: »

If you are claiming the lump sum and your state pension in the same year, you will need careful timing to avoid paying tax on it.

True. I am only just in the tax bracket so a few months of not working will take me out of it. I believe you can take the pension and leave the lump sum until the following year.