New job with non contributory pension

JoeCrystal

Marcon said:

The John Lewis DB scheme closed to future accrual in April 2020.

Another generous scheme bites the dust. Thank you for the update.

AlanP_2

13Kent said:

We do claim child benefit so that I can get my NI stamp, but we do a self assessment tax return anyway and declare it as he's already near the threshold with the pension he gets. 

Do we take it from this that you are not in employment and contributing to a pension yourself? What is your pension situation like as it sensible to try and have at least enough income each in retirement to use up the personal allowance. 

13Kent

I am self employed, but am just under the tax threshold so don't pay tax. I have a teacher's pension with a £25,000 lump sum and £9000 per year. I don't think I can pay AVC's to this. I also have an Aviva pension, which was worth about £14 000 (just £52 a month at the end of the last financial year)  however I have increased the contributions for this to £100 a month over the last year as my earnings have increased. The last time I looked I was eligible for the full state pension. I am also 54.

AlanP_2

13Kent said:

I am self employed, but am just under the tax threshold so don't pay tax. I have a teacher's pension with a £25,000 lump sum and £9000 per year. I don't think I can pay AVC's to this. I also have an Aviva pension, which was worth about £14 000 (just £52 a month at the end of the last financial year)  however I have increased the contributions for this to £100 a month over the last year as my earnings have increased. The last time I looked I was eligible for the full state pension. I am also 54.

Contributing to your husband's pension would attract 40% tax relief on up to 20K but will probably be taxed at 15% on retirement (25% tax free & 20% on remainder).

Contributing to your Aviva pot, up to your earned income as gross contribution, would be a free 20% top up from HMRC as you don't pay tax and then taxed at a maximum of 15% in retirement. Depending on when you want to retire you could potrentially get it all out tax free ahead of starting teacher's DB pension and State Pension.

In an ideal world both, but overall income may not stretch that far. 

13Kent

Interestingly I've just re checked my state pension and the contributions for NI from Child benefit were not the full NI contributions last year - only 33 weeks were paid. I didn't realise once my youngest was 12 the contribution was no longer paid, I thought it was when he was a bit older. Once hubby starts this new job there will be no point in claiming CB any more as all of it will have to be repaid. (currently we've been paying a percentage back).  I also need to pay a contribution for last year and I will also need to pay one for this year to top up my pension to the full amount. (I only have 2 more years to complete to get the full amount.). If I pay a voluntary contribution  do I declare that payment on my self assessment as a pension contribution? Also does anyone know how much the contribution will be for a full year? I need to pay £285 for the shortfall for the last financial year.

Dazed_and_C0nfused

If I pay a voluntary contribution do I declare that payment on my self assessment as a pension contribution?

No, not something that goes on a Self Assessment return.

13Kent

Is there a way of paying a regular top up contribution rather than paying it all in a lump sum? I have 33 full years so only need 2 more years to reach the full amount. I'll top up the £285 so presumably that will be 34 full years so I would only need one more year, I'm guessing might be about £800 for the year??

13Kent

Or is it financially more prudent to ignore the shortfall in my state pension and pay the extra into my Aviva pension instead?  Currently the difference by not topping up my state pension is just £6 a week. Decisions decisions!!

Dazed_and_C0nfused

13Kent said:

Is there a way of paying a regular top up contribution rather than paying it all in a lump sum? I have 33 full years so only need 2 more years to reach the full amount. I'll top up the £285 so presumably that will be 34 full years so I would only need one more year, I'm guessing might be about £800 for the year??

35 years aren't relevant for you as you are under transitional rules.

What does your State Pension forecast actually show, in full?

It may be you need 35 years but that is coincidence, not because you meet the new State Pension rules.

Dazed_and_C0nfused

13Kent said:

Or is it financially more prudent to ignore the shortfall in my state pension and pay the extra into my Aviva pension instead?  Currently the difference by not topping up my state pension is just £6 a week. Decisions decisions!!

Hard to find a better investment that the new State Pension.

For example if your current forecast is less than £170 and you pay the £285 that will add £5/week to your State Pension.

So just over a year after you start getting your State Pension you will have got your £285 back (bit longer if you pay tax on it).  But you could continue to receive that extra £5/week for 30+ years.