Take a career break / retiring now?

No_Name

I’m sure most of us have pondered over this, but would it be possible to retire early if you had the funds to support yourself until state pension age, then claim a state pension?

Silly question, but can one even be entitled to a state pension after 20+ years out of a job?

In my situation, I have been working full time for the past 20 years. Not that I have, but if I did have the funds to support myself and family for the remaining say 25 years, would I be entitled to a state pension?

Mnd

I've retired earlier than my state pension age, not 20 years though! You will be entitled to your pension at whatever the age is however you need to keep abreast of your contributions as this will affect the level of your pension.

No_Name

Mnd wrote: »

I've retired earlier than my state pension age, not 20 years though! You will be entitled to your pension at whatever the age is however you need to keep abreast of your contributions as this will affect the level of your pension.

Thanks Mnd - newbie here, but could you elaborate on the contributions bit please?

Sorry for silly question.

xylophone

First obtain a new state pension statement which will clarify your position.

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

https://www.ageuk.org.uk/information-advice/money-legal/pensions/the-new-state-pension/

Triumph13

For your plan to work you need 3 things:

1. Enough money to live on until state pension age;
2. Enough additional money to pay as many years of voluntary contributions as are needed to get you to the full SP (eg if you had 20 years with no contracting out you'd need another 15). These currently cost around £750 per year.
3. To be able to survive on just the SP when you got there.

Silvertabby

Yes, but if you only have 20 years of NI contributions then you will only get 20 years worth of State pension.

It's complicated, and depends on if you were contracted in or out of SERPS/SP2 prior to 2016, but:

Not contracted out = £159 /35 x 20 = £90.86 per week single tier(new) State pension per week.

Contracted out = £120 /30 x 19 = £76 plus one year of post 2016 (£4.40) = £80.40 per week.

(You'd actually get the higher of the 2 calculations).

This is a VERY rough guide - you need to obtain your foundation amount (as at April 2016) from DWP then add on £4.40 for every full year of NI after that.

Mnd

They've explained it far better than I could!

No_Name

Interesting, something to think about if I'm ever in a position to retire early!

Maybe after tonight's Lotto!

Thanks for your thoughts everyone.

If anyone else has further thoughts, please share!

No_Name

Just thought I'd add that I'm only considering the viability.

Although I don't think I'm currently entitled to anything from the state, I've never relied on government handouts and have always paid my way.

Mnd

If you have paid 20 years national insurance then you are entitled to a state pension. Go onto the government pension website and get a state pension forecast, then you can use this as a basis for your plans

JoeCrystal

No_Name wrote: »

Although I don't think I'm currently entitled to anything from the state, I've never relied on government handouts and have always paid my way.

.... State Pension is a form of government handout. I could never really understood the thinking behind that. I mean, if you use free education, child benefit, NHS healthcare and so on, then that is a form of government handout as well. If one is entitled to benefit then, one should claim it. Otherwise, what is the point of paying taxes to provide benefit for public good if people do not claim them?