Retirement Worries

bigfreddiel

wheezy57 wrote: »

To those who cannot see the worry or the problem obviously are not in a position to advise. It is a major worry to me....

There are people in the this country or indeed on this forum who do not have family, advisers, tax advisers, pension advisers or any other kind of advisors. If you didnt understand my worries then why did you comment.

Perhaps you could explain your worry in more detail so we can be in a better position to advise.

Start by telling us how much you earn and what your sp will be.

That would help us all a lot.

Cheers fj

Spirit_2

If you currently earn less than £10600 ayear then adding your state pension is going to put you in a position where you will pay tax on earnings+pension over £10600 @ 20%. When your income reaches £31785 the rate over this changes to 40%. As you describe yourself in terms of earning little I caanot see how receiving your pension and continuing to earn full time will make you worse off. As others have said you need to give more info to get clearer help.

patanne

Hi Wheezy - I think you have a financial question that you are not actually asking. Perhaps it would help us to help you if you would. I don't think that once you are over state pension age that you can claim anything other than pension credit. That is not going to be a good thing to be dependent on as they are intending to freeze it, which will mean less and less each year, just as things may get more expensive. If pension sharing was the norm when I got divorced I would be living in the lap of luxury now so I do understand that aspect.

I am also of the opinion that him stopping paying maintainence set me free.

But all that aside - do you know what your state pension will be as that will help your planning. Would someone (Xylophone or Jem??) please post the link as I don't know how.

p00hsticks

patanne wrote: »

But all that aside - do you know what your state pension will be as that will help your planning. Would someone (Xylophone or Jem??) please post the link as I don't know how.

The link to get a state pension is here

https://www.gov.uk/state-pension-statement

Wheezy - I agree with patanne that you've not expressed what's really worrying you. As others have pointed out, yes, you may pay more tax if you continue working when collecting your state pension, but that's because your overall income will be higher , so you'll be better off overall, not worse off.

Is it that you don't think you are going to manage on your state pension alone once you give up work ? If you can give a clearer idea of what is really bothering you, then we may be able to give more help.

jamesd

I don't think it's hard to understand why wheezy57 is worried overall and in need of help:

wheezy57 wrote: »

I am due to receive SP early in Jan of next year. I shall be still working full time. ... I dont have any other pension whatsoever... I wasnt advised at any time on pensions or my retirement or my future. So, I am terribly worried about what happens next.

It seems that she first needs to know what her state pension position will be, then a benefits check that can say how much it can be worth paying into pensions. The Savings Credit means that some pension savings will be useful even for a person on means tested benefits but we really need to know more about the whole situation to comment sensibly. It's something that might best be done by the local CAB. It's entirely sensible for a person whose only income may be the state pension plus means tested benefits to be worried and looking for understanding of their full position and their options to improve their situation in retirement.

xylophone

James, the actual query in the first post appeared to relate to tax on drawing a pension as well as a salary?

People have tried to answer this question?

The poster says that she is working full time - even on minimum wage she'd almost certainly be paying some tax so McKneff's comment (to which the OP replied brusquely) seems relevant in the circumstances?

It is also unclear (because the OP has not provided the information) whether she is in receipt of any benefits which receipt of a state pension might affect or whether she would have so little state pension that if she retired that she would qualify for PC and other benefits.

Again, she is working full time but there is no mention of whether there is any occupational pension or could be if she continues to work beyond state pension age?

If the OP would simply ask the real questions, somebody might be in a position to supply the answers or guidance to where the answers might be found?

wheezy57

Thank you all. My position is thus...

I have had a forecast of £113 per week from the DWP. If I claim my SP then my NI would stop. I can still keep working. I earn just over the threshold which means if I claim SP then my PA would be affected. If i dont claim then I would still be paying NI.

I have no other pensions or income currently or due. Im not sure tbh what is really worrying m,e. I think that Im worried about making the wrong decision and then ending up worse off or indeed in a situation where I am liable to pay money back or extra tax or be penalised in some way. I only have to make any decisions that benefit me, but I need to know the options. Pitfalls, warts and all.

I live alone. I have a mortgage. I dont earn very much for my full time work. I dont get overtime, subsidies, enhancements or any other sideline work.

My health is not good, but then again Im well enough to work full time albeit with a bit of struggle. I apologise for being a tad obtuse with my original post. And my reactions to your reactions!!

In an ideal world I could just pop along to a financial whiz and he/she would then set out the pros and cons of the situation. And then have to pay a huge wallop for the privilege! In an ideal world my ex could have factored me into his plots and schemes and I wouldnt be here asking obscure questions. In ideal world I could be now retired on a final salary pension after working for 40 years and living a rather sedate and comfortable (reasonably) retirement. But, my cards have been laid out differently.

Sorry for the ramble but does anyone see what I mean...

jem16

wheezy57 wrote: »

Thank you all. My position is thus...

I have had a forecast of £113 per week from the DWP. If I claim my SP then my NI would stop. I can still keep working. I earn just over the threshold which means if I claim SP then my PA would be affected. If i dont claim then I would still be paying NI.

As I said in Post 4, your PA is not affected. You will still get the full £10,600.

Tax will be due on the £113pw state pension as you earn just over the £10,600 tax free threshold.

You will get the full £113 paid into your bank account. However £22.60 will be due in tax and that tax will be taken via your salary at work. This is why it APPEARS to reduce your PA - it doesn't actually reduce it and it's only a way for PAYE to take tax due on your state pension which is paid with no tax taken off.

So you will have an extra £90.40 each week.

Sorry for the ramble but does anyone see what I mean...

We can see what you mean but you are worrying under a few misapprehensions with regards tax and NI.

Are you paid monthly or weekly? If you want to give me the amount you earn each week/month and the tax and NI you normally pay I can show you a worked example to allay your fears.

[Deleted User]

Hi Wheezy.

You pay NI on wages, but you don't pay NI on wages if you've reached the state pension age. You don't state how old you are, but it seems that you have reached SP age because you say you could draw your SP. Whether or not you draw your state pension, you won't pay NI on your wages if you carry on working beyond SP age. So your decision as to whether or not to draw your SP now shouldn't turn on whether you will have to pay NI or not. You won't pay NI whether or not you draw the SP now.

There is a scheme to defer drawing your SP beyond SP age. For some people this may be a good idea, but it doesn't turn on the paying NI/not paying NI issue.

PennyForThem_2

Once you reach SP age with entitlement to draw it you DO NOT pay any more national insurance etc.

If you can survive on your pay (ESPECIALLY without NI contribution) and are willing to work full time, defer your SP. It will earn 10.4% for as long as you do not need to draw it (for those eligble before Ap 2016)

There is little on the market with NO RISK where you can obtain 10.4% interest. You earn as long as you defer.

When you choose to take your SP you have a choice:

1. Take as lump sum (this may be better for those in poor health)
2. Take as increase in SP income (better if you think you are going to live longer)

There is a tax implication in taking lump sum as it will be taxed, but then so will your additional weekly income under 2.