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No longer a tax payer

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  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
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    Make sure you look past the headline. Which may be that your forecast is £168.60.

    What matters is the next bit, how much you have earned so far. And how many years you need to reach £168.60.

    If you are under £168.60 then remember in theory each extra year buys you £4.81 but in this situation you cannot exceed £168.60 so if you have a current entitlement of say £163.00 one extra year will take you to £167.81. A second year will only take you to £168.60, it won't add another £4.81

    You may already be over £168.60 in which case you cannot improve your forecast.

    Don't forget if you have worked for part of this tax year you may have already earned another year towards your State Pension although this won't show on your forecast until after April next year.

    And you can in theory earn £18,500 in taxable interest before you have any tax to actually pay (£12,500 Personal Allowance + £5,000 savings starter rate of tax (0%) + £1,000 savings nil rate of tax (0%). But any earnings will reduce that, potentially down to £1,000. Or less if you earn enough.
  • 6pac6pac Forumite
    10 posts
    Wow that’s confused me lol.
    The forecast says
    “You have:
    34 years of full contributions”

    Do I only have to pay for 35 years?
    I have 16 years left till my retirement age.
  • BoGoFBoGoF Forumite
    6.3K posts
    Part of the Furniture 1,000 Posts
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    But how much is your projected pension?
  • Dazed_and_confusedDazed_and_confused Forumite
    6.5K posts
    Uniform Washer
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    The 35 years rule doesn't apply to you.

    You are under transitional rules which can mean 30 years might be enough. Or you could need 40+ years.
  • 6pac6pac Forumite
    10 posts
    Sorry for the delay, it says

    You need to continue to contribute National Insurance to reach your forecast

    Estimate based on your National Insurance record up to 5 April 2018
    £164.31 a week
    Forecast if you contribute another year before 5 April 2034
    £168.60 a week
  • p00hsticksp00hsticks Forumite
    8K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
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    6pac wrote: »
    Sorry for the delay, it says

    You need to continue to contribute National Insurance to reach your forecast

    Estimate based on your National Insurance record up to 5 April 2018
    £164.31 a week
    Forecast if you contribute another year before 5 April 2034
    £168.60 a week


    So you only need one more year from April 2018. If I were you I'd check your forecast again in a few months to see if 2018-19 has been included as a full year.
  • 6pac6pac Forumite
    10 posts
    Brilliant, thank you very much everyone for your input, I’m so glad I joined the forum, having worked on paye all my life I’ve never had to worry about stuff like this before. It’s been a great help.
  • t0rt0iset0rt0ise Forumite
    3.4K posts
    Tenth Anniversary 1,000 Posts Name Dropper
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    6pac wrote: »
    Having money saved in an isa is no longer worth while then?

    It depends what you do in the future. If you go back to work it would be good to have less tax to pay on interest, and/or when you retire if you have enough pensions, private plus state, you might need tax free interest. So you might regret not putting some of your savings in ISAs bit by bit until then.
  • getmore4lessgetmore4less Forumite
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    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
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    6pac wrote: »
    I recently took voluntary redundancy and I’ve decided to live off my savings. (I have no income and don’t receive any benefits) I was wondering how being a none tax payer would effect the interest I get on my savings?
    From what I’ve read a 20% tax payer can earn £1000 per year without paying tax but I can’t find any info for the rules if I earn nothing at all. Am I missing something obvious?


    The first tax year(19-20) will be different, unless recently is more than 5 months ago therefore no earning in this tax year.
    You will have earned this year and there may be surplus redundancy that is taxed.

    ISA still have a place as a tax wrapper if also investing as you get protection from income and CGT.

    don't forget your P50.
    https://www.gov.uk/government/publications/income-tax-claiming-tax-back-when-you-have-stopped-working-p50
  • skatersrusskatersrus Forumite
    13 posts
    I would advise you to contribute to your NI as you go. It will be a big bill in a lump sum and you might not be able to contribute later. Also you can only go back so many years.

    Interest on all savings are paid in Gross. Before they were paid net. So you shouldn't need to request changeover from the bank, but do double check.

    You need to fill out self assessment if you earn any money over £500. The figure might not be correct, it was a long time ago when I researched this. Self assessment as the name suggests does not need an accountant and you can fill it out yourself. You can claim back any overpaid income tax if you have worked only part of the year (income tax is taken with the assumption that you will continue to earn the same for the rest of the year.
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