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Deferring a further year and/or Top Up ..etc
Comments
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Many Thanks .... I believe I now have it!
In my case it would mean if I were doing it:
What I'd get:
(1) Basic State Pension
(2) Additional Pension - in my case only a miniscule bit of
(2.a) Graduated as I have been contracted pretty much out all of my life.
(3) Extra Pension
(3a) Extra Basic Pension 10.4% of (1) for each year.
(3b) Extra Additional Pension 10.4% of (2a) for each year
Increases
(1) is subject to triple lock increases (3) currently increases by CPI.
Inheritance
Wifey would inherit 100% of (3a) and 50% of (3b) ie the deferred graduated and 50% of (2).
I think I have got it now. Really easy isn't it .....
Piece of pie ....
Just need to work out any best tax advantages for your circumstances and you are home and dry ......
Just keep off the mushrooms ..... :cool:0 -
Thanks I'm always going to be a basic rate payer so it is all pretty neutral.
The approach of deferring year on year is a great opportunity and is a no brainer compared with the top up.
On a side issue, when the "new pension" was announced I felt a real sense of grievance as it looked like something else we'd missed out on. But as it emerges, as someone who has always been contracted out, the original pension with the better deferment etc seems to me to be better.
The only outstanding grievance I have is the humber of years of voluntary additional contributions I wasted for wifey and me to buy extra years - even in the year they announced a reduction on qualifying years. Talk about misselling. It would be a nice gesture of they could be used for top ups. That would buy my vote ....
We are however very very fortunate. I put in the maximum into my defined benefits pension, then transferred out but then transferred back under misselling with a large contribution from the financial advisor insurance and I seemed to have made a profit out of it. DB were a stonking opportunity although I put 16% in and we did without holidays etc it was very good. I feel so sorry for the next generation of retirees.
Thanks again to all that patiently talked me through this.0 -
Thanks I'm always going to be a basic rate payer so it is all pretty neutral.
Yes, but you might consider other options to enhance, e.g. the missus and I have opened SIPP accounts to maximise on the tax benefit, esp as she is currently a non tax payer.The approach of deferring year on year is a great opportunity and is a no brainer compared with the top up.
Yes - top up is less generous. Some will say deferral is a no brainer, my view is that if you look at the various options for your situation and do a 'what if' analysis then you will make a more informed judgement on deferral benefit.On a side issue, when the "new pension" was announced I felt a real sense of grievance as it looked like something else we'd missed out on. But as it emerges, as someone who has always been contracted out, the original pension with the better deferment etc seems to me to be better.
As I have been contracted out for most of my years I am in similar situation - however, the 'starting amounts' will ensure there is no losing out, regardless of deferral.The only outstanding grievance I have is the humber of years of voluntary additional contributions I wasted for wifey and me to buy extra years - even in the year they announced a reduction on qualifying years. Talk about misselling.
An example of how change of governments, rules, etc means doing something now might turn out to be a drawback somewhere down the line. Certainly need to keep finger on pulse for all of these issues and the benefit of these forums is that it is easier to identify when changes occur and how they might affect individual circumstances.Thanks again to all that patiently talked me through this.
Its all good bro .......0 -
Thanks again.
I take a very odd and unusual view of investment strategies. For example I moved all of my investments out of equities all into long term bank savings accounts almost at the right moment a long long time ago.
The result of that was I missed most of the turmoil but I am only now expiring those longterm high interest savings accounts. Some were at 6.25% and I tied in long-term quite a lot within ISAs. As an indication I have a fairly hefty lump just dieing out at around 4% but it was at around 5.5% a few months ago. This lump sum is in fact used as a sinking fund that when combined with the DB pension plus odds and sods pensions is what we currently live on and have been living on and so with the exception of unplanned for care fees in the hopefully distant future ... which we intend to bypass if we can ... we should have enough to last us.
We own outright a second home that we thankfully do not need to rent out or anything. That is our extra buffer. Neither home is mortgaged.
I'm lucky in that we'be really masterd the "miles" and hotel schemes and we travel in considerable style and at manageable cost several times a year to Singapore which we consider a "third home".
So the bottom line sum total of this is I don't believe I need to speculate or take any risks. That would be only for greed, and I like not to worry. So no sipps or any equities and I am just going to manage all our acorns like it was a large sinking fund.
We are very fortunate but I did give up a large corporate salary to start our own business and I guess we were just lucky.
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I'm lucky in that we'be really masterd the "miles" and hotel schemes and we travel in considerable style and at manageable cost several times a year to Singapore which we consider a "third home".
So the bottom line sum total of this is I don't believe I need to speculate or take any risks. That would be only for greed, and I like not to worry. So no sipps or any equities and I am just going to manage all our acorns like it was a large sinking fund.
You are well sorted then it seems. I would fully agree about not needing to speculate or take risks - age and risk are inextricably linked - as one goes higher the other should be moving in the equally in the opposite direction
Indeed, your original query about what wifey might get from the state pension if you eat the mushrooms seems it will have little impact on the overall position - but it is still best to know all the options and entitlements. 0 -
Thanks ... yes ... in simple terms the whole basis of my question was really about "now my savings are maturing and will be replaced by low interest savings should I be using my cash to live on further to avoid us both taking state pension" and the answer to that is a very clear "yes". The spouse pension is simply me telling wifey. She is lovely but totally clueless. Every so often I get her to sit down and try to log in to banking accounts but she still has no idea. I'm relying on the kids to sort her technicals out. I like to look after her so just hearing she gets a bit more is just reassuring. I've told her to find a young fit bloke when I pop my clogs to make up for the time she's wasted with me! I think she is looking forward to it! 0
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Thanks ... yes ... in simple terms the whole basis of my question was really about "now my savings are maturing and will be replaced by low interest savings
You were defo fortunate with the interest rates - its a while ago since rates like that were available. Still, there are ways of maxing a bit more than the general standard 1.5%.The spouse pension is simply me telling wifey. She is lovely but totally clueless. Every so often I get her to sit down and try to log in to banking accounts but she still has no idea.
Same here - herself has no interest in matters financial or technical. For many years I played the 0% Credit Cards for both myself and the missus. We did very well out of it and we have had a 20 year mortgage interest free. It's the best bit of financial work I will do. However, on the occasions I had to get herself to talk to the Credit Card company, e.g. to close an account, it was a major manoeuvre to get her to do it!!! Shuffling 20 credit cards was a doddle as opposed to getting the missus to make a 2 minute phone call to one of them.I've told her to find a young fit bloke when I pop my clogs to make up for the time she's wasted with me! I think she is looking forward to it!
hmmm ... I'd be double checking any mushrooms she puts on your plate for dinner .....0 -
Unless it sets you stumbling into a higher tax bracket, it's awfully hard to find a better low-risk investment than pension deferral for anyone with objective reason to hope they might have a long life.Free the dunston one next time too.0
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Unless it sets you stumbling into a higher tax bracket, it's awfully hard to find a better low-risk investment than pension deferral for anyone with objective reason to hope they might have a long life.
If I'm really honest .... I'm more concerned about us living really long and finding I have spent all my cash sensibly ie on booze, food and travel and kitchen gadgets I use once ... than I am about leaving a bit more inheritance .... 0 -
You were defo fortunate with the interest rates - its a while ago since rates like that were available. Still, there are ways of maxing a bit more than the general standard 1.5%.
Same here - herself has no interest in matters financial or technical. For many years I played the 0% Credit Cards for both myself and the missus. We did very well out of it and we have had a 20 year mortgage interest free. It's the best bit of financial work I will do. However, on the occasions I had to get herself to talk to the Credit Card company, e.g. to close an account, it was a major manoeuvre to get her to do it!!! Shuffling 20 credit cards was a doddle as opposed to getting the missus to make a 2 minute phone call to one of them.
hmmm ... I'd be double checking any mushrooms she puts on your plate for dinner .....
I still smugly look at that stash in Newcastle until 2017 earning 4.2% but it grieves me that I have a stack of Halifax ISAs at 4.25% expiring over the next month or so. We both have a stack in Birmingham Midshires as an ISA for 5% until May 2016. Lovely. Sometimes you do things and everyone thinks you are dumb at the time .... "take your cash out of shares and put it in a bank account ....!?!?"
You deserve a hell of a lot of bunny points for your mortgage shenanighans. So wise. I had one of those joint mortgage and savings accounts when they first came out and used my own account for temporary storing revenue from my business ....:D
The best cash balance transfer I was able to milk was a BMI MBNA one where they made a small error in the small print. Or in fact two. It carried interest ... but ... they gave BMI miles for cash balance transfers but rather dumbly set the maximum charge at £70. Not many people read the small print. What an opportunity. Not 1% of £30k, 1% effectively on £7k. So wifey and I each with a £30k limit immediately started to transfer cash to our bank account and when it was on it's way sent a credit back again and we did this twice a week for many weeks. So minimal interest for a day or two. We earned so many miles ...... dozens and dozens of flights. We spent several years flying around Europe in Business and it became the seeds of our BA First Class Flight Fund which we use with Amex 241s. Nothing compared to your free mortgage though.
The other sensible thing was employ a really good accountant practice. They had an ex-inspector. I hated those bills but did he make us money.
People that work hard and save enough should count themselves lucky ... but I wish they'd let us keep more.0
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