Early retirement and NI

jem16

Two colleagues have just been offered early retirement from teaching with 2 years enhancement. They have 32 & 34 years of service and have paid NI for those years too.

However they won't receive their state pensions until 2014 at the earliest. Am I right in saying that they won't need to pay any more NI if they take this offer as they already have 30 years NI contributions?

EdInvestor

Yes, I'd have thought so, if their retirement date is 2014.Obviously they should get a pension forecast in due course when the computer's up again.

jem16

Thanks Ed.

I will mention the forecast but they will have to make their decision before that's available again unfortunately. I just didn't want to lead them up the garden path when helping them to decide if they can afford it or not.

seven-day-weekend

My husband has 36 years NI, he also is a retired teacher. His state retirement date is January 2014.

I rang and asked if he would have would have to pay any more NI and was told that he would not.

Perhaps your colleagues can do the same?

Hope this helps.

Ian_W

jem,
My understanding is that the 2007 Pensions Act made 30yrs contributions the trigger for full basic state pension for those reaching state retirement age in 2010 and this is confirmed by the TPAS website:

Those reaching SPA on or after 6 April 2010 will only require 30 qualifying years to claim the full BSP.

If they take up other employment they will usually have to pay NI but if, for example, they do some supply work or tutoring on a self employed basis there is a "Small Earnings Exemption" where they needn't pay class 2 NIC if they earn less than about £4600pa but they will need to claim this as it's not automatic. Don't know whether that limit applies to employed positions I'm afraid.

jem16

Ian_W wrote: »

jem,
My understanding is that the 2007 Pensions Act made 30yrs contributions the trigger for full basic state pension for those reaching state retirement age in 2010 and this is confirmed by the TPAS website:

Those reaching SPA on or after 6 April 2010 will only require 30 qualifying years to claim the full BSP.

That's what I thought too. However I didn't want to get it wrong and then they found out that they had around £100pm less than we worked out.

If they take up other employment they will usually have to pay NI but if, for example, they do some supply work or tutoring on a self employed basis there is a "Small Earnings Exemption" where they needn't pay class 2 NIC if they earn less than about £4600pa but they will need to claim this as it's not automatic. Don't know whether that limit applies to employed positions I'm afraid.

Believe me supply work will not come into the picture at all! They may of course do some kind of work if need be but it will be as far away from a school as possible - suffice to say we're all cheesed off with teaching these days.

I am extremely jealous of them at the moment. One good friend at work retires next week and now two more good friends look like they might be getting to retire too. :sad:

seven-day-weekend

jem16 wrote: »

That's what I thought too. However I didn't want to get it wrong and then they found out that they had around £100pm less than we worked out.



Believe me supply work will not come into the picture at all! They may of course do some kind of work if need be but it will be as far away from a school as possible - suffice to say we're all cheesed off with teaching these days.

I am extremely jealous of them at the moment. One good friend at work retires next week and now two more good friends look like they might be getting to retire too. :sad:

Why do you think my husband went when he was 55?!

I assume you know that you can take your pension at 55? It will be permanently actuarilly reduced if you take it before you are 60 but it depends how desperate/broke you are whether you mind about this! The Authority can only refuse once, and then only for six months. So, if you give a year's notice like my husband did, you'll have no problems.

He took his pension and we ran off to Spain!

Hope this helps.

jem16

seven-day-weekend wrote: »

Why do you think my husband went when he was 55?!

I assume you know that you can take your pension at 55?

Yes I know.

It will be permanently actuarilly reduced if you take it before you are 60 but it depends how desperate/broke you are whether you mind about this!

That's the only drawback really. You can lose up to a 25%. As you sau it will depend on how I feel at the time.

At least with an early retirement package you don't have this reduction - plis hopefully you get some enhancement.

The Authority can only refuse once, and then only for six months. So, if you give a year's notice like my husband did, you'll have no problems.

He took his pension and we ran off to Spain!

Hope this helps.

Its amazing how the authority don't wonder why so many people rush to take up any early retirement offer.

seven-day-weekend

My husband was 55 and eight months when he went....but he had a long history of a mental health condition and couldn't carry on any more.

He did lose nearly a quarter but we can live on it here in the sticks in southern Spain.

Just thought I'd mention it in case you didn't know!

jem16

Part of me would jump at any offer and part of me says i'm not sure I can afford it yet. I'm a single parent ( lost my husband five years ago in an accident) with my younger son in his last year at university.

At least with working I have the company but now it looks as if three of my closest friends are about to retire, I'm looking on with envious eyes and thinking I don't want to be there any more.

What i really enjoy is my computing work within school - I'm the ICT Co-ordinator. I'd love to do the area ICT Co-ordinator's job and did get as far as an interview about 3 years ago. However I was told by the ICT head of Education Resources that she hadn't heard of me before! It seems your face has to fit.