Taking pension, continue to work.

p00hsticks

https://forums.moneysavingexpert.com/discussion/comment/81872789#Comment_81872789

The £800 taken from one pension will count as taxable earnings whatever you do with it. The question is really what you can do with your earnings from employment to correspondngly reduce the amount of tax paid from that to compensate..

kempiejon

I will be 60 in June & plan on taking my DB pension & continue to work for 1-2 more years. My pension will be approximately 60k lump sum & £800 per month.

I earn approximately 45k per year,so pay a higher rate of tax (Scotland)

Will your income in retirement mean you'll be paying 42% tax in 1 -2 years time when you retire?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81872739#Comment_81872739

As above £500 a year extra for deferring a year sounds OK. If you are 60 , and live an average lifespan, you will be getting that extra for 25 years, Could well be longer.

Steviekia

https://forums.moneysavingexpert.com/discussion/comment/81872855#Comment_81872855

Thanks,

Il be paying lower rate of tax when I retire from employment,as my only income will be from my pension & savings,

I have no mortgage or debt & my wife has a reasonable income.

Tbh, due to recent events,I've come to the conclusion that life is too short,I've worked since I left school & worked 12hr shifts for the last 30yrs.

Having money in my 70s or 80s doesn't interest me,I'm still healthy & fit now,I doubt that will be the case in 10-20 years.

I'm just struggling to work out what best suits my needs.

Thanks

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81872802#Comment_81872802

It would though be increased over the possibly 30 years you woul get it by a reasonable % annually

Albermarle

Having money in my 70s or 80s doesn't interest me,I'm still healthy & fit now,I doubt that will be the case in 10-20 years.

When you get to your 70's and are still fit and well, you might think differently. Plenty of people in their 70's live full and active lives, regular holidays etc.

Even later in life money can be useful for all sorts of things. 25 % of people live until they are at least 92. If you are fit and well now, with no very bad habits and are educated with no financial worries, you chance of reaching your 90's will be better than 25%.

Cobbler_tone

https://forums.moneysavingexpert.com/discussion/comment/81873405#Comment_81873405

Stevie working 12 hour shifts for 30 years has probably reduced the chances.

I did the same….days, nights, weekends for 30 years. Thankfully left that behind a few years back. Mid-50's and knackered! It totally messes with your sleep and body.

Steviekia

https://forums.moneysavingexpert.com/discussion/comment/81873405#Comment_81873405

Unfortunately my father had lots of money in his 70s ,normal working man,grafted all his days, didn't live a lavish life, got dementia,into a home & lost the lot,

Life certainly is a gamble.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81873578#Comment_81873578

It certainly is, but if you look at the odds of having to go into a care home in your 70's, it is actually pretty low.

Your Father's unfortunate experience is thankfully not typical.

Secret2ndAccount

If you had an £800/mth pay rise at work, and decided to pay it all into your pension, we would all be commending your sensible planning. You would, as you suggest, be saving a lot of tax.

If you get a pension of £800/mth, and decide to pay it into your pension, that is a good plan, and in my opinion, not recycling, even though it saves you a lot of tax. You could have done it even if there was no tax free lump sum. If you made an extra one-off payment of 30k into your AVC, that would be in considerable danger of looking like recycling. If you decided to increase your AVC by £1000/mth instead of £800, you could invite further scrutiny.

Paying your pension into a pension is allowed and is not recycling. Using your lump sum to increase your pension contributions could be recycling, whether the increase is one-off or monthly; whether it occurs before or after the lump sum. In my view, what you are suggesting is fine.