Civil Service Classic Pension at 60

emmric

I'm due to receive my CS pension in the next few months when I reach 60 - around 15k pa and a lump sum of around 40k - my state pension age is 67. I will stop work at age 60. The 45k is tax free regardless? What would be the best thing to do with the lump sum in terms of limiting tax and providing an income from age 60-67 and after please? 

Dazed_and_C0nfused

Have you been working in the current tax year?

Pension contributions are tax efficient and even as a basic rate taxpayer you can make a 6.25% return without any risk (tax relief on way in and taxed on just 75% on way out).

Nowadays with pension flexibilities you can focus on shorter term pensions rather than thinking it needs to be for life (annuity).

westv

Yes, the £45k is tax free. 

xylophone

The pension commencement lump sum is tax free.

Have you obtained a state pension forecast?

If so, does it indicate that you will receive a full new state pension without any further contributions?

emmric

My state pension forecast shows I'm 2-3 years' contributions short of the full amount. I am working currently. 

xylophone

My state pension forecast shows I'm 2-3 years' contributions short of the full amount. I am working currently. I will stop work at age 60. 

You will earn enough in the current year to make it a "full year"?

You will make voluntary contributions thereafter to bring you up to a full NSP?

You could consider opening a SIPP and contributing as much as possible while you are working -

https://forums.moneysavingexpert.com/discussion/comment/78786441/#Comment_78786441

 after you cease paid employment you can continue to contribute a net £2880 per annum   (to which will be added £720  claimed by the pension provider) up to the time you reach age 75.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired

AlanP_2

xylophone said:

My state pension forecast shows I'm 2-3 years' contributions short of the full amount. I am working currently. I will stop work at age 60. 

 after you cease paid employment you can continue to contribute a net £2880 per annum   (to which will be added £720  claimed by the pension provider) up to the time you reach age 75.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired

Just to clarify that applies in tax years with no employment income, if contribution made in last tax year of employment it can be made after ceasing paid employment.