When to stop work Birthday or end of March

cmayflower

Hello, is there a benefit in either finishing work at your birthday (mines in November) or carrying on till the end of March. I'm trying to work out which works best, complete years for birthday and therefore age, or tax year for NI contributions I'll have 37 years NI from March this year. I fully intend to finish work completely at 55 (Two years from Nov 2019)

Marcon

Have you obtained a state pension forecast: https://www.gov.uk/check-state-pension

NI contributions work in tax years and you'll be under the 'new' system for state pension, so having 37 years of contributions won't get you a full state pension.

cmayflower

Thank you. Yes, I've checked the State Pension site and have a state pension forecast in writing so I know what I'm in for. I'm not relying on the state pension, it'll be an added 'bonus' when/if it kicks in with the age increases. I've been working full time since the age of 16 and have always paid into other workplace pensions during that time. I also have savings. I was more curious what if any implications there would be from leaving in the middle of a financial year or at the end.

enthusiasticsaver

You will probably get a tax refund if you stop in November as the assumption is you are working for the whole tax year and the personal allowance is spread over the full 12 months. Depends on pension arrangements though.

cmayflower

Great, thank you, that makes sense.

nick74

Marcon wrote: »

Have you obtained a state pension forecast: https://www.gov.uk/check-state-pension

NI contributions work in tax years and you'll be under the 'new' system for state pension, so having 37 years of contributions won't get you a full state pension.

It's 35 years contributions to get a full state pension under the new system so the OP will already have more than enough contributions.

cmayflower

nick74 wrote: »

It's 35 years contributions to get a full state pension under the new system so the OP will already have more than enough contributions.

Yes Thank you.

The statement also says that for every additional year worked between now and SPA I could earn at least £1.75 per week additional pension = £21 per year.

Interestingly the statement also says the maximum qualifying years needed to get the full basic state pension is 30.

xylophone

It's 35 years contributions to get a full state pension under the new system so the OP will already have more than enough contributions.

The OP is in the transitional arrangements and may have contracted out at some point- in which case 37 years may not be enough because there may be a high COPE.

molerat

nick74 wrote: »

It's 35 years contributions to get a full state pension under the new system so the OP will already have more than enough contributions.

Unfortunately not. 35 years only fully applies to those starting out from April 2016. Everyone with a prior history is on a hybrid system and 37 years may not give a full pension if contracted out. As an example I have 39 years and will be paying for another 3 but can not achieve the full amount.

nick74

Yes you're right, I hadn't taken account of possible previous contracting out, I stand corrected.

hugheskevi

Exact point of leaving usually doesn't make much difference. Some of the things I consider when choosing optimal leave date are:

• Date have to be in employment to receive bonus
• Date of leaving to coincide with a favourable time to sell / buy property
• Ensuring Personal Allowance or basic rate allowance will be fully used
• National Insurance qualifying year - requires working a few months into financial year
• Avoiding leaving just before months with Bank Holidays or in February
• Having last day of service on a Monday to get paid for weekend days