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?

Retired_I.F.A.

Refer someone who needs the job to the employer.

sleepless_saver

Defer taking the lump sum until after the tax year after you finish doing the part time job? Or start ccontributing to a personal pension to bring you down to under 40%.

Elizabet

Sleepless Saver. Many thanks for your helpful advice. And.......Retired IFA.......thanks for the welcome!

Retired_I.F.A.

Well, lets face it Liz you don't need the money do you? Keep active in retirement but sod working. No one has ever on their deathbed has said they wished they had spent more time working.

chesky369

Even if you defer, you don't HAVE to take the lump sum, you can take the increased weekly pension instead - you have to work out nearer the time which would be the best for the tax point of view.

sleepless_saver

Retired_I.F.A. wrote: »

Well, lets face it Liz you don't need the money do you? Keep active in retirement but sod working. No one has ever on their deathbed has said they wished they had spent more time working.

You have no idea whether the OP needs the money or not. For all you know she could be supporting a mortgage, debts and student children. In any case it is irrelevant to her question. Your comments are hardly welcoming to a new poster, and I wonder why you have bothered to make them. Perhaps you need more activity in your retirement:rolleyes:.

Retired_I.F.A.

sleepless_saver wrote: »

You have no idea whether the OP needs the money or not. For all you know she could be supporting a mortgage, debts and student children. In any case it is irrelevant to her question. Your comments are hardly welcoming to a new poster, and I wonder why you have bothered to make them. Perhaps you need more activity in your retirement:rolleyes:.

I Cant help it, it's getting addictive posting common sense then waiting for the idiots who read a question but see a statement like yourself, they put at least one smile on my face each day.

chesky369

I don't think I am imagining it but there was another message posted I am sure between the two latest posts - where did it go?

exil

The obvious answer is to defer the state pension (if this is possible when you're already in receipt, I don't know) to age 65 when the tax allowance increases dramatically.

The thought of having enough pension to threaten the 40% tax band (that is, £40,000 a year) does sound remarkable I have to admit!

chesky369

Look on the bright side Elizabet - you might hate the job.