Retirement - state pension deferral

Steve_xx

xylophone wrote: »

According to the Age UK factsheet

 "People reaching State Pension age from 6 April 2016 will no longer be
entitled to the Savings Credit part of PC. Anyone already entitled to Savings Credit from this date will continue to qualify for it."

As his official retirment date is this November, he would still get the Pension Credit Savings element even if he took a lump sum at some point later I guess. But I'm reading that the amount people get seems to be reducing and it seems that the government is phasing it out even for existing claimants. I'm referring to the Savings bit of Pension Credit here as opposed to Pension Credit.

xylophone

There is some more information about savings credit here

http://www.moneysavingexpert.com/savings/pension-credit

anmarj

Steve_xx wrote: »

Ah yes of course. So he will need to check closer to next April.

Thanks for the links provided, excellent.

Yes he does have some savings, circa 10k and so I reckon he will get some Pension Credit Savings element even if he didn't get Pension Credit. Though I think I read that they are phasing this out slowly but surely?

Saving credit is being abolished from April next year for new pensioners, existing pensioners on it will be phased out by them not increasing it

anmarj

Steve_xx wrote: »

As his official retirment date is this November, he would still get the Pension Credit Savings element even if he took a lump sum at some point later I guess. But I'm reading that the amount people get seems to be reducing and it seems that the government is phasing it out even for existing claimants. I'm referring to the Savings bit of Pension Credit here as opposed to Pension Credit.

pension credit is the name of the overall benefit, savings credit is one part of it. Under PC, he would not be allowed to defer his state pension, and would be treated as still being in receipt of this.

Steve_xx

An update on this question. He has received an update of what his state pension will be from November of this year when he is due to retire. It appears that it will be £154.50.

Now he plans to stay employed full time and draw his pension too. I have two questions to ask:

1.Once he gets to 65 he will stop paying NI contributions, I think? Will his employer also stop paying Employers NI contributions too?

2. I can see that he would be above the income threshold to recieve Pension Credit and of course I understand he wouldn't get that anyway whilest he remained in employment and earning. However, I wondered if he would be entitled to Savings Credit even though he is still working? He has about 9k saved.

xylophone

The employee no longer pays NI but the employer does.

https://www.gov.uk/tax-national-insurance-after-state-pension-age/stopping-paying-national-insurance

His salary plus pension is likely to be too high for savings credit.
http://www.moneysavingexpert.com/savings/pension-credit?_ga=1.137412855.632060106.1405012823

Steve_xx

xylophone wrote: »

The employee no longer pays NI but the employer does.

https://www.gov.uk/tax-national-insurance-after-state-pension-age/stopping-paying-national-insurance

His salary plus pension is likely to be too high for savings credit.
http://www.moneysavingexpert.com/savings/pension-credit?_ga=1.137412855.632060106.1405012823

Regarding NI - on the link you provided it seems to state that an employee stops paying NI contribution when they reach state pension age:

What happens at State Pension age

At State Pension age:

• you stop paying Class 1 and Class 2 contributions, even if you’re still working

anmarj

Steve_xx wrote: »

An update on this question. He has received an update of what his state pension will be from November of this year when he is due to retire. It appears that it will be £154.50.

Now he plans to stay employed full time and draw his pension too. I have two questions to ask:

1.Once he gets to 65 he will stop paying NI contributions, I think? Will his employer also stop paying Employers NI contributions too?

2. I can see that he would be above the income threshold to recieve Pension Credit and of course I understand he wouldn't get that anyway whilest he remained in employment and earning. However, I wondered if he would be entitled to Savings Credit even though he is still working? He has about 9k saved.

Under PC, he would not be allowed to defer his state pension, and would be treated as still being in receipt of this, it is not solely about savings, it is about income as well. If his earnings and notional state pension take him over the limit for savings credit he will not get it.

This is from the NI government site but it is not any different on this side of the water.


If you claim Pension Credit while you defer claiming your State Pension (or shared additional pension), your Pension Credit will be worked out as if you were getting your State Pension.

If you or your partner defer, or have already deferred claiming your State Pension while claiming Pension Credit, you don't build up extra State Pension or the lump sum for the days you are getting Pension Credit.

Steve_xx

anmarj wrote: »

Under PC, he would not be allowed to defer his state pension, and would be treated as still being in receipt of this, it is not solely about savings, it is about income as well. If his earnings and notional state pension take him over the limit for savings credit he will not get it.

This is from the NI government site but it is not any different on this side of the water.


If you claim Pension Credit while you defer claiming your State Pension (or shared additional pension), your Pension Credit will be worked out as if you were getting your State Pension.

If you or your partner defer, or have already deferred claiming your State Pension while claiming Pension Credit, you don't build up extra State Pension or the lump sum for the days you are getting Pension Credit.

Yes I see what you mean. He is planning to take his state pension as soon as he reaches 65 in November. He isn't now planning to defer it. He is planning to continue working and I now understand that his state pension plus his earnings will push him over the upper limit of £188.25 per week for Savings Credit.

xylophone

Regarding NI - on the link you provided it seems to state that an employee stops paying NI contribution when they reach state pension age:

Yes - this is what I said.

The employee no longer pays NI but the employer does.

See http://taxaid.org.uk/guides/information/an-introduction-to-income-tax-national-insurance-and-tax-credits/national-insurance/national-insurance-and-state-pension-age