Workplace Pension And A 74 Year Old Me!

WoodruffsDad

I shall be 74 in May.I currently work 09:00 to 17:30 for 3 days per week as an Office Manager and I am paid via P.A.Y.E. I earn around £1,100.00 per month net after tax. I don't pay any N.I. I have no plans to retire and my employer is keen for me to continue as long as possible.

By law he has now offered me the option to join (or not) the workplace pension scheme and he is not trying to influence my decision either way.

I have no other pension in place, only the state pension which gives me around £780.00 per 4 weeks.

At my age is there any advantage in my joining the workplace pension scheme?

atush

yes, there is. You get tax relief and the employers contribution.

Do you need your state pension to live on? If not you c ould defer it and get 10.4% uplift each year you defer. AS you took your state pension under 'old rules'

Triumph13

atush wrote: »

yes, there is. You get tax relief and the employers contribution.

You'll only get tax relief for the next 14 months until you are 75, but it may still be worth it after that for the employer's contribution, particularly as it looks like when you do retire you'll be a fair way below the personal allowance (unless you defer your SP for a few years as Atush wisely suggested).
Joining should be well worth while, you just need to make sure that you don't end up in a position where contributions post-75 are taxed twice as you wouldn't get relief as they go in to the pension, but would be taxed as they came out if you were above your PA.

badmemory

Are there any penalties for taking the pension post-75. For instance is it all taxable with no tax free lump sum?

Triumph13

No penalties. Age 75 only matters now because a)it's the age beyond which you can't get tax relief on contributions, b)Various Lifetime Allowance calculations are triggered and c)if you die before 75 your uncrystallised DC pot can be inherited tax free.

kidmugsy

Triumph13 wrote: »

No penalties. Age 75 only matters now because ...

I have a memory that it used to be true that you lost your right to the TFLS when you passed 75. Has that restriction gone? Or is my memory false?

HappyHarry

kidmugsy wrote: »

I have a memory that it used to be true that you lost your right to the TFLS when you passed 75. Has that restriction gone? Or is my memory false?

Your memory is not playing tricks. It used to be (until April 2011) that you were forced to purchase an annuity at age 75, thereby having to take tax free cash at that point.

Now however, annuity purchase is not compulsory so the policy holder can still receive their tax free cash at any age.

However, upon death after 75, the beneficiaries lose all rights to any tax free cash that has not been taken, as pension benefits will be taxed on the beneficiaries at their marginal rates of income tax.

zagubov

Every extra year you stay alive adds 11 weeks to your life expectancy. You can obviopusly still provide for your future, and as it's probably expanding, you should add to your pension pot.

bigadaj

zagubov wrote: »

Every extra year you stay alive adds 11 weeks to your life expectancy.

And they said I couldn't live for ever, the fools!

ThinkingOutLoud_2

zagubov wrote: »

Every extra year you stay alive adds 11 weeks to your life expectancy.

Does this mean if I die tomorrow, they will have the gall to take 11 weeks off my life expectancy too? Have they no respect?
:rotfl: