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Taking Final salary pension while still working part time.
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LinHy
Posts: 3 Newbie

I've reached 60 and am now able to access my Final Salary Pension of just over £9k per annum. I want to continue working part time, and taking into account the pension, my earnings will still keep me in the lower tax bracket. I know I will pay tax on my pension sum, but surely its still to my advantage to take the pension now and be approx £600 better off per month, or am I missing something?
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LinHy said:I've reached 60 and am now able to access my Final Salary Pension of just over £9k per annum. I want to continue working part time, and taking into account the pension, my earnings will still keep me in the lower tax bracket. I know I will pay tax on my pension sum, but surely its still to my advantage to take the pension now and be approx £600 better off per month, or am I missing something?Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1
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I would just throw one thing out there. Check the date on which you receive inflation increases, and see what those increases are before you take the pension, and after you start to take it. Many pensions have, for example, a 5% cap on annual increase. Before you take the pension, the growth is averaged over the duration of your pension accumulation. Since the average is well below 5% per year, you get the full, potentially 10.1% increase for this year. Once in payment, the increase for this year might be capped at 5%. So, by waiting one year, or even part of a year (until Jan 1st or Apr 6th) you could be 5% better off for life. This would also apply to any lump sum which is calculated as a multiple of your annual pension.
It depends completely on the particular rules of your scheme, but it could be worth considering a short delay before claiming. Get hold of your scheme rule-book.2 -
Its not clear if the part time job is with the same employer.
If it is the OP should ask their employer about flexi retirement options.1 -
I take a FPS and work as well - my tax code is split between the two so I have some tax free allowance on both,
All seems fine to me.1 -
I did this during Covid to help out and have now stuck to two days a week and love it. I took two pensions, a Final salary from one employer for which i got figures to take then (58 & 3/4) and also at 60, very little difference. I also converted a second pension to a SIPP which was going great until the downturn this year but it will pick up.
I love the part time life but my wife is older and also retired so life is good.
the only thing negative is that once you have started taking the pension you are restricted to what you can actually pay in to any ongoing pension scheme - I think its around £4k / year but not got paperwork with me.
Totally Debt Free & Mortgage Free Semi retired and happy0 -
Thank you all for the useful comments, I will definitely check the date on the inflation increase before I take it.0
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Indout96 said:I did this during Covid to help out and have now stuck to two days a week and love it. I took two pensions, a Final salary from one employer for which i got figures to take then (58 & 3/4) and also at 60, very little difference. I also converted a second pension to a SIPP which was going great until the downturn this year but it will pick up.
I love the part time life but my wife is older and also retired so life is good.
the only thing negative is that once you have started taking the pension you are restricted to what you can actually pay in to any ongoing pension scheme - I think its around £4k / year but not got paperwork with me.0 -
Can you check there isn't a limit on how much you can earn post-retirement. In education for example you can't receive a full pension if your resulting overall income takes you above your Salary of Reference.
Other occupations may have different rules.There is no honour to be had in not knowing a thing that can be known - Danny Baker0 -
I am also doing what you are considering - taking a DB pension while continuing to work part-time.
One thing you might want to bear in mind (if you have not already) is that your pension scheme may pay a higher amount if you delay when you start taking it. In my case I waited until after my 61st birthday and get a higher pension than if I had drawn it at 60. It wasn't a massive difference but of course, it applies for as long as I live. It also has an effect on the pension my wife will get from the scheme if I die before her.
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mtc95 said:I am also doing what you are considering - taking a DB pension while continuing to work part-time.
One thing you might want to bear in mind (if you have not already) is that your pension scheme may pay a higher amount if you delay when you start taking it. In my case I waited until after my 61st birthday and get a higher pension than if I had drawn it at 60. It wasn't a massive difference but of course, it applies for as long as I live. It also has an effect on the pension my wife will get from the scheme if I die before her.0
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