Advice on keeping income tax as low as poss.

Elizabet

Hi there, I'm a newbie. I am 62 and receive an NHS pension and state pension. Could do with some ideas/advice please. I have just been offered a part-time job but this will take me into the 40% bracket. Have thought about deferring state pension, but then I guess whenever I claim it, if I claim it in the form of a lump sum, that will be taxed at 40% as well!! So, what would be the most tax efficient way to proceed?

EdInvestor

If you defer your state pension the rule on the lump sum is that it can't push you into a higher tax bracket than you would otherwise be in.

So if you are on BRT when you take the money it should also be taxed at basic rate.

You can also take the money in the form of a higher (index linked) pension which may be a good idea if you plan to live a long time