Continuing working whilst collecting pensions

aspatria_2

I shortly reach 65 yo, I have set up to receive 2 small pensions from the Co-op which amount to £300.00 pm and I'll collect £624.00 pm from my Gov pension statement.

I'll also receive approx £16K tax free from my Co-op pension

I currently earn £60k + py and I intent to carry on working for approx a further 2 years. I'm in a final salary pension with my employer.

The question is from April 15th I won't be paying NI, but will receive the pensions above, is it worth while offsetting the amount I won't pay in NI and what I receive from the pensions to buy employer AVC's so I won't be paying large amounts of tax?.

In short I would like to keep my monthy income the same but reduce my take home pay by the amount received in pensions the difference being put into the AVC's

kidmugsy

aspatria wrote: »

I shortly reach 65 yo, I have set up to receive 2 small pensions from the Co-op which amount to £300.00 pm and I'll collect £624.00 pm from my Gov pension statement.

I'll also receive approx £16K tax free from my Co-op pension

I currently earn £60k + py and I intent to carry on working for approx a further 2 years. I'm in a final salary pension with my employer.

The question is from April 15th I won't be paying NI, but will receive the pensions above, is it worth while offsetting the amount I won't pay in NI and what I receive from the pensions to buy employer AVC's so I won't be paying large amounts of tax?.

In short I would like to keep my monthy income the same but reduce my take home pay by the amount received in pensions the difference being put into the AVC's

I suspect that many people in your shoes would go further, and aim simply to contribute enough to pensions to avoid higher rate tax. That would mean establishing how much annual allowance they could carry forward from the previous three years, and how much annual allowance would be consumed in a current year by the increase in value of their DB pension. They might look at the laws constraining recycling of tax-free lump sums, and hold back from taking all the TFLS from the Co-op as early as this.

Mojisola

aspatria wrote: »

I shortly reach 65 yo, I have set up to receive 2 small pensions from the Co-op which amount to £300.00 pm and I'll collect £624.00 pm from my Gov pension statement.

I'll also receive approx £16K tax free from my Co-op pension

I currently earn £60k + py and I intent to carry on working for approx a further 2 years. I'm in a final salary pension with my employer.

Why not defer your state pension?

Alter_ego

Mojisola wrote: »

Why not defer your state pension?

Too late to get 10.4% it's down to 5.8% if your SPA is after today, or is it 6th April?

greenglide

nSP starts on 6/4/2016. The deferral rate goes down that day for people with an SPa date 6/4/2016 or later.

So not yet. April 1st would have been appropriate for all this though!

kidmugsy

Deferring still make sense if it lets you drop the tax on the SRP from 40% to 20%. Deferring the co-op pension mighty be a good idea too: why pay 40% tax on it? What's the rush?