Voluntary redundancy and retirement

atush

onlyroz wrote: »

They're not babies anymore and he already picks them up from school twice a week.

Part time job during shcool hour. Dinner man, crossing guard anyone

onlyroz

atush wrote: »

If the CB isnt in his name, he needs to egister as a carer to get NI?

Interesting point. Our youngest is seven so if I transferred the CB to his name then would this give him an extra 11 years of NI contributions "for free"?


Edit - looks like he would get 5 years, until she turns 12.

onlyroz

atush wrote: »

Part time job during shcool hour. Dinner man, crossing guard anyone

He's expressed an interest in becoming a professional dog walker...

bigadaj

onlyroz wrote: »

He's expressed an interest in becoming a professional dog walker...

Might that change when he realises what he'll have to clear up and collect?

xylophone

Re CB

https://www.moneyadviceservice.org.uk/en/articles/protecting-your-state-pension-when-you-have-a-baby

You indicate that you expect to substantially increase your salary over the next couple of years - see https://www.gov.uk/child-benefit-tax-charge/overview

If you find yourself with an income over £50,000, you could consider increasing your own pension payments to reduce your adjusted net income.

Your husband should obtain a new state pension statement to check his starting amount.

onlyroz

Yep my aim is to keep my taxable pay below £50k for as long as possible.

We also found today that his pension will be reduced by 4% for every year before 60 that he retires, so ideally he shouldn't draw from the final salary pension until 60.

My current thinking is that he should take the tax free £30k and use that to live on until 55. Then he can put the £70k into a pension and draw from that from age 55 until it has run out. By this point he will hopefully be close to 60 at which point he can claim the final salary pension.

Sound like a plan?

atush

Sounds like a plan to me?

onlyroz

Can anybody explain how the tax relief would work if he were to put £70k into a SIPP?


I understand that he could put in £40k a year tax free but he can use up unused allowance from previous years. So does this mean that he could put the whole £70k in tax free? Or does it depend on what his salary is (around £36k)?


Also, what is the process for obtaining the tax relief? Will he be given the pay-out with the tax already deducted and then he has to claim it back?

bigadaj

onlyroz wrote: »

Can anybody explain how the tax relief would work if he were to put £70k into a SIPP?


I understand that he could put in £40k a year tax free but he can use up unused allowance from previous years. So does this mean that he could put the whole £70k in tax free? Or does it depend on what his salary is (around £36k)?


Also, what is the process for obtaining the tax relief? Will he be given the pay-out with the tax already deducted and then he has to claim it back?

You are limited to your income for the year, so presumably £36k from what you have stated.

You would normally contribute 80% of the sum, so £28,800 in your example and the baxi rate tax would be reclaimed by the pension provider from Hmrc. If you lay higher rate tax you would claim the additional back separately but on that salary there presumably is no additional tax to reclaim.

onlyroz

bigadaj wrote: »

You are limited to your income for the year, so presumably £36k from what you have stated.

You would normally contribute 80% of the sum, so £28,800 in your example and the baxi rate tax would be reclaimed by the pension provider from Hmrc. If you lay higher rate tax you would claim the additional back separately but on that salary there presumably is no additional tax to reclaim.

So could we put in £28.8k this year and the same next year?


From my back-of-the-envelope calculations, we get given £70k which is taxed, and will go into the higher rate tax bracket. Around £40k will be taxed at 20% and £30k will be taxed at 40%, so we end up with roughly £50k in our pocket?


We can then put £28k into a pension this year (claiming 40% tax relief if we were charged higher rate tax on the lump sum?) and the remainder can be put in next year.


Have I got this right?