Deferring the state pension

royeee

Blimey this is/was relevant to the Silver Savers forum and was originally posted in January 2008 and just because I commented to this thread this week it woke the powers up to shunt the whole thread the pensions forum. What is the logic as its much more relevant to the Silver Savers brigade where financial issues have been discussed unhindered. Grrrr!

hethmar

Ive just received a letter telling me I can claim my pension from next March or defer it - every 5 weeks deferred giving me an extra 1% on my pension. I shant get the full whack as I had the small stamp for all my married working life and then I stayed at home for the kids and since then have only had part time jobs. I have paid about £1k lump sums in over the past few years to buy extra years to bump my pension up.

I was thinking of deferring the pension because I still have a part time job at £430 a month. If I take the pension which I reckon will be something like £64 a week wont that be taxed? Wouldnt it be better to defer and then take the pension when Im no longer earning that amount?

My private pension will be only about £3000 pot which I understand I can take in one lump as its so small.

Any advice gratefully received.

nbgrobbo

I'm a firm believer in one in the hand so long as the tax position isn't an issue.

If you've no other personal or occupational pensions you will be able to draw the £3K as a lump sum, but 75% of it will be taxable, only 25% (currently - being cynical, I think the renaming of 'tax free' cash to pension commencement lump sum by HMRC in 2006 was getting us ready for the inevitable tax on lump sumes at some point) available tax free.

hethmar

Hi, the £3k is a scottish widows pension which I paid a low amount in over the last 15 years or so.

So it would be taxed would it didnt think that it would.

And my other query - any one please - if I keep my part time job earning £430 a month and take my state pension next March which is about £64 a week - will I have tax to pay?

seven-day-weekend

If your total income, including all your wages and pensions, is over your personal tax allowance then you will have to pay tax.

nbgrobbo

Regardless of you tax position, most pension companies will deduct tax and then you can reclaim from HMRC if you don't pay tax (as seven-day-weekend pointed out, you'll need to add 75% of the £3K to your other taxable income).

Tillydot

Hi
I will be 60 on February 10th 2010. What date can you draw your pension from. I have had a letter saying two months before you are 60 but you dont get it then I know just wondered when you did. Someone on here said a couple of weeks after you are 60?

EdInvestor

If you take it weekly, you will get it on the first Monday after your birthday.

seven-day-weekend

If you apply to have it weekly, it's the first Monday after your birthday, as Edinvestor says. Otherwise it's four weekly and it's a month or maybe a little more after your birthday.

You have to apply for it two months before your birthday (or sooner, like I did!). But you won't get it until after your birthday.

curryous

[FONT=&quot]I have just claimed my state pension after deferring for five years and am inclined to take the extra pension and design my lifestyle accordingly. After all, if annual increases are percentage-based and are on the total pension, ie basic + additional + extra, the gap between this and the lower state pension will widen considerably as time goes by. Also, even if I snuff it, the residue in the pot will be paid out to my good wife so all is not lost.
I have one whinge, however, about the provision: this residue, while slowly dripping its extra pension increments, does not seem to gain interest while being in the state’s coffers. Surely this is unfair business practice, especially if interest rates increase to their earlier heights?[/FONT]