Career Break/Draw Down/NHS Pension

Mell60_2

Hi, I am 58 and I am taking a 2 year unpaid career break in order to provide childcare for my grandson. Would it be possible to fund my unpaid leave by drawing down from a cash sipp I have, until I start back to work? I work in the NHS and have a small pension which I could draw at 60 but I would like to continue to pay into it when I return to work. Any advice would be greatly appreciated.

kidmugsy

Mell60 wrote: »

Hi, I am 58 and I am taking a 2 year unpaid career break in order to provide childcare for my grandson. Would it be possible to fund my unpaid leave by drawing down from a cash sipp I have, until I start back to work?

Yes.

Mell60 wrote: »

I work in the NHS and have a small pension which I could draw at 60 but I would like to continue to pay into it when I return to work. Any advice would be greatly appreciated.

Can you tell us which of the various NHS pension schemes is yours? How long do you plan to work after returning?

Have you had any salary in tax year 17/18? Do you expect to have any in 18/19?

Mell60_2

That’s good to hear. I am in the 1995 scheme. I intend to start my career break 17th April 2018 so the only salary for 18/19 will be 2 weeks.

Mell60_2

My state pension doesn’t start until 2026 so I may have to work another 5 or 6 years on return.

PeacefulWaters

Mell60 wrote: »

My state pension doesn’t start until 2026 so I may have to work another 5 or 6 years on return.

Maybe.

But you could build up a new personal pension in that time to pay for another year off perhaps.

And you should familiarise yourself with the impact of drawing your NHS pension early on retirement income.

Kynthia

Do you still need to make any NI contributions to your state pension? If your grandchild's parents don't need the NI credits that claiming child benefit brings and your grandchild is under 12 years then they could pass the NI credit to you. I've just passed two years worth to my mother.
https://www.gov.uk/government/news/looking-after-the-grandchildren-make-sure-it-counts-towards-your-state-pension

Mell60_2

PeacefulWaters wrote: »

Maybe.

But you could build up a new personal pension in that time to pay for another year off perhaps.

Thank you, I didn’t realise I could start a new personal pension when I’ve already started to draw down one.

And you should familiarise yourself with the impact of drawing your NHS pension early on retirement income.

I’m not going to draw I until I’m at least 60 when it’s payable without reduction. :j

Mell60_2

Kynthia wrote: »

Do you still need to make any NI contributions to your state pension? If your grandchild's parents don't need the NI credits that claiming child benefit brings and your grandchild is under 12 years then they could pass the NI credit to you. I've just passed two years worth to my mother.


Yes, I need 4 more years, my daughter mentioned this,,that will help a lot

kidmugsy

Mell60 wrote: »

That’s good to hear. I am in the 1995 scheme. I intend to start my career break 17th April 2018 so the only salary for 18/19 will be 2 weeks.

Excellent. That means you can draw down the 25% tax-free lump sum, and a fair bit of tax-exposed money untaxed too, because you'll have almost all your income tax Personal Allowance available. Depending how much capital you have in your SIPP you could drawdown more untaxed in 19/20, assuming that you will have no (or little) employment income in that tax year.

This means that you might like to see if you can contribute more to your SIPP before the end of this tax year (05/04/2018) and whether you'll be able to afford a contribution in 18/19: you'll be allowed to contribute £2,880 net => £3,600 gross.

Mell60_2

Apologies, All, I’m new to posting/replying and seem to be making a mess of try to respond appropriately using quotes


Yes, I need 4 more years, my daughter mentioned this,,that will help a lot

AnotherJoe

In the years you aren’t working you can pay £2,880 into your SIPP which will get an extra £720 added.