Child Tax Credit - Continuation

FIREDreamer

If I were to achieve FIRE and then decide to retire early (but over 55), would resigning from my job and start taking my pension mean that the tax credits stop and I would be forced onto universal credit?

Or does this change of circumstance mean I can still stay on tax credits?

I am aware that tax credits close by the end of next year, 2024, via forced migrations, but would rather retain them as long as possible.

Thank you.

calcotti

I have no idea what we mean by achieving 'FIRE'.
You will not be eligible for Working Tax Credits if not working. You would still still be eligible for Child Tax Credits if applicable.
For UC all pension income is deducted in full from the UC payable. Unless you are a carer or unfit for work you would be expected to spend 35 hours/week looking for work.

Jyana

calcotti said:

I have no idea what we mean by achieving 'FIRE'.
You will not be eligible for Working Tax Credits if not working. You would still still be eligible for Child Tax Credits if applicable.
For UC all pension income is deducted in full from the UC payable. Unless you are a carer or unfit for work you would be expected to spend 35 hours/week looking for work.

FIRE is Financial Independence, Retire Early.

FIREDreamer

calcotti said:

I have no idea what we mean by achieving 'FIRE'.
You will not be eligible for Working Tax Credits if not working. You would still still be eligible for Child Tax Credits if applicable.
For UC all pension income is deducted in full from the UC payable. Unless you are a carer or unfit for work you would be expected to spend 35 hours/week looking for work.

Thanks.

No, just child tax credits. Not intending to work again. Earned too much for working tax credits

… so not forced onto universal credit as won’t be eligible?

Also …

Jyana said:

calcotti said:

I have no idea what we mean by achieving 'FIRE'.
You will not be eligible for Working Tax Credits if not working. You would still still be eligible for Child Tax Credits if applicable.
For UC all pension income is deducted in full from the UC payable. Unless you are a carer or unfit for work you would be expected to spend 35 hours/week looking for work.

FIRE is Financial Independence, Retire Early.

Though not that early in my case!

calcotti

FIREDreamer said: No, just child tax credits. Not intending to work again. Earned too much for working tax credits

Currently your Tax Credits will be assessed on WTC and CTC. If then not working then the claim with become assessed on CTS only.

poppy12345

Yes by end of 2024 is what they are expecting. However, it could be before or after that time. If it's before what will you do then? Any pension will be deducted in full so you won't be financially better off. They have already started the migration process for those claiming Tax Credits. If you don't claim UC within 3 months your Tax credits will end.

calcotti

poppy12345 said:

Yes by end of 2024 is what they are expecting. However, it could be before or after that time. If it's before what will you do then? Any pension will be deducted in full so you won't be financially better off. They have already started the migration process for those claiming Tax Credits. If you don't claim UC within 3 months your Tax credits will end.

But OP says

FIREDreamer said:

… so not forced onto universal credit as won’t be eligible?

I inferred that OP is prevented from UC due to capital over £16,00 but I may have jumped to conclusions!

OP, note that even if you have capital over £16,000, under Managed Migration from Tax Credits the capital limit will we disregarded for 12 months.

Spoonie_Turtle

[This is not judgemental, just genuinely trying to understand - how does still claiming benefits square with the notion of financial independence?]

Regardless, there are practical problems with your idea as pointed out above, unless you are indeed a carer or unfit for work.

FIREDreamer

Spoonie_Turtle said:

[This is not judgemental, just genuinely trying to understand - how does still claiming benefits square with the notion of financial independence?]

Regardless, there are practical problems with your idea as pointed out above, unless you are indeed a carer or unfit for work.

Tax credits enabled (helped) me to pay silly money into my pension via salary sacrifice since we have been mortgage free for over 20 years and just drawing down on historic savings (PCLS) to top up any monthly shortfall.

Looking at some old posts here I don’t seem to be the only one taking advantage of this pension boosting loophole. However apart from state pension in a few years we won’t qualify for any further state largesse.

I guess a year’s tax credits (not the full theoretical amount by any means) won’t make much difference to the final outcome of retirement or not - I just asked the original question for information.

Rubyroobs

Jyana said:

calcotti said:

I have no idea what we mean by achieving 'FIRE'.
You will not be eligible for Working Tax Credits if not working. You would still still be eligible for Child Tax Credits if applicable.
For UC all pension income is deducted in full from the UC payable. Unless you are a carer or unfit for work you would be expected to spend 35 hours/week looking for work.

FIRE is Financial Independence, Retire Early.

Surely you are not financially independent if relying on tax credits to live ? 

Spoonie_Turtle

FIREDreamer said:

Spoonie_Turtle said:

[This is not judgemental, just genuinely trying to understand - how does still claiming benefits square with the notion of financial independence?]

Regardless, there are practical problems with your idea as pointed out above, unless you are indeed a carer or unfit for work.

Tax credits enabled (helped) me to pay silly money into my pension via salary sacrifice since we have been mortgage free for over 20 years and just drawing down on historic savings (PCLS) to top up any monthly shortfall.

Looking at some old posts here I don’t seem to be the only one taking advantage of this pension boosting loophole. However apart from state pension in a few years we won’t qualify for any further state largesse.

I guess a year’s tax credits (not the full theoretical amount by any means) won’t make much difference to the final outcome of retirement or not - I just asked the original question for information.

Sorry, I really truly didn't mean any judgement at all, my question was purely along the lines of relying on tax credits reconciling with the notion of independence.  But whatever, if it works, good for you and I wish you well.  [I truly have zero objection to people claiming anything they're entitled to within the rules, which is exactly what this board is here for!]  

Hopefully the comments from more knowledgeable posters have given you the information you were seeking