Being stupid or doing the right thing?
Comments
-
http://www.litrg.org.uk/tax-guides/pensioners-and-tax/what-state-pension-deferral
Is the private pension you mention in your first post a deferred Defined Benefit pension?
Do you have a pension with your current employer and/ or are you contributing to any other pension?0 -
To be honest, I haven't got a clue as to what sort of pension it is. I was working at the time and when you reached a certain age, you had to join their pension scheme, I was in my 20's at the time. I am 64 now. I never really took any notice of it, it was just taken out of my wages. When I left there, I went to a company that didn't have a pension scheme, so left it where it was. Then I went self employed. I remember years ago, I did get in touch with them to find out how much was in and was told around £6000, I thought to myself that that wasn't going to be worth much when I retired and more or less forgot about it. I didn't really pay much into it but with the interest building up over around forty years, when I asked about it last year, it had grown to around £24,000.
I am self employed now and have not taken out any other pensions.
Someone on here mentioned Annuities but I don't really know what they are.0 -
liketoknow wrote: »To be honest, I haven't got a clue as to what sort of pension it is. I was working at the time and when you reached a certain age, you had to join their pension scheme, I was in my 20's at the time. I am 64 now. I never really took any notice of it, it was just taken out of my wages. When I left there, I went to a company that didn't have a pension scheme, so left it where it was. Then I went self employed. I remember years ago, I did get in touch with them to find out how much was in and was told around £6000, I thought to myself that that wasn't going to be worth much when I retired and more or less forgot about it. I didn't really pay much into it but with the interest building up over around forty years, when I asked about it last year, it had grown to around £24,000.
I am self employed now and have not taken out any other pensions.
Someone on here mentioned Annuities but I don't really know what they are.
You joined a company pension in your 20s. How long did you stay working for that employer? Was it a public sector job or a private sector job?
If you did not meet the number of qualifying years why was that? You must have been out of work for many years? Were you a carer? Abroad? Ill? Do you agree that you did not meet the number of qualifying years?Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
It was private sector, I worked for them for around ten years but did not qualify to join the pension scheme until about half way through. The company closed the branch I was working at, I got offered employment at another branch 40 miles away but I left as I did not want the travelling. I think I was around 25 when I qualified for their pension scheme.
Re NI, I have never been out of work. I cared for my dad who had Alzheimers, I was self employed at the time and had to run my business down a lot to care for him. I did not claim any benefits although I could have claimed carer's allowance. I did agree that I did not meet the number of qualifying years, some years I was short as I just could not afford the stamps. I have only ended up about £8 short of the Basic rate pension anyway with just over £111 a week. I had 27 fully paid up years and 20 which were short.0 -
Just because it was a private sector company does not mean that the pension was not defined benefit.
You would expect a deferred pension to increase in deferment.
What was the normal retirement age for the scheme?
If you have reached scheme pension age (or if this is a DC pension and you are over PC age) you would be expected to apply for the pension before you could be considered for eligibility for Guarantee Pension Credit.
Does your state pension statement show a contracted out deduction?
You realise that you can still contribute to a pension scheme and obtain tax relief?0 -
Just because it was a private sector company does not mean that the pension was not defined benefit.
You would expect a deferred pension to increase in deferment.
What was the normal retirement age for the scheme?
If you have reached scheme pension age (or if this is a DC pension and you are over PC age) you would be expected to apply for the pension before you could be considered for eligibility for Guarantee Pension Credit.
Does your state pension statement show a contracted out deduction?
You realise that you can still contribute to a pension scheme and obtain tax relief?
I really have no clue what sort of pension it is, I've not thought about it for years. That works pension is still gaining interest as I have not touched it. Its the deferred part of the State pension which has stopped now that I have started receiving weekly payments.
I emailed the management company of the works pension a few weeks ago, asking about it, how much I would get if I took it in April and what happens to it if I die before I have claimed it. They just wrote back saying what would happen to it when I die and said that when I gave them a date of retirement, they could give me the figures. I had said I only wanted a rough idea. Without the figures, I wouldn't know if I wanted it yet.
A new management company is taking over at the beginning of April, so I will write to them and ask.
I think it could be drawn from 55 years old but not 100% sure.
I don't want Pension Credit yet as I am still working and will be for the forseeable future. That is also why I want to hang onto the works pension, I don't think I will be eligible for PC, but would be for Savings Credit with having the other pension.
I don't know where to look to see if my State pension has a contracted out deduction but I would assume so as I was paying into the works pension.
I had not thought about contributing into a pension scheme. I don't earn enough to pay tax anyway and even with my pension added to my earnings, I don't think I will. If I draw the deferred state pension as a lump sum, I will regulate my earnings in 2017/2018 so that I stay below the personal allowance and therefore not have to pay tax on it. Its just knowing what is best to do with it when I do draw it, I would like it to be earning some sort of interest otherwise there is no point in drawing it yet.0 -
Sigh. The works pension could totally change the best thing to do. That may mean that your income is too high to qualify for Pension Credit/Universal Credit. If it is too high then the best thing to do with the state pension would be to pay for three missing years and defer claiming it, using your private £24,000 pension to help fund this.
The extra state pension from deferring increases with inflation every year if you don't choose the lump sum option. The lump sum option is usually a bad deal.
You do not need to take a regular income from a private pension or buy an annuity. You can take 25% as a tax free lump sum and leave the rest in "flexible drawdown" which lets you take out any amount as taxable money whenever you like. No charge to do this at places like Hargreaves Lansdown and you can just transfer if the place where it is now doesn't offer flexible drawdown.
Normal pension age from the works pension was probably 60 but it could be 65. Usually there is no increase for taking it later than the normal pension age but sometimes there is.
Fortunately you can still defer the state pension once even after claiming it. So once you get the answer from the works pension you can start to defer again if that looks like a good move, which it probably is.
You can pay to make up missed state pension years at least as far back as six years using normal rules but if you reached State Pension age between 6 April 2010 and 5 April 2015 you can go back as far as 1975 to pay for incomplete years. I think that one doesn't apply to you but there's a other one for a man born after 5 April 1951 or a woman born after 5 April 1953 that lets you pay for gaps between April 2006 and April 2016. I think you probably can find three incomplete years within that time range and just pay for the cheapest three to get you to thirty years total.0 -
You can get about £720 a year of free money by continuing to make pension contributions. More for a few years. You can make pension contributions up to your earned income or £3,600 a year, whichever is higher, after tax relief.
So if you can get it done in time you could take the tax free lump sum from the private pension, pay 80% of your self-employment earnings into a pension then take out 25% of that also as a tax free lump sum. Then taxable money as needed. After talking the taxable money you can pay in only up to £4,000 after tax relief not your full earnings. You get the tax relief added even if you pay no tax.0 -
I really have no clue what sort of pension it is
I suggest that you find out.That works pension is still gaining interest as I have not touched it.
It isn't gaining interest. It may have been increasing in deferment, either by statutory increases/ scheme pension rules/ late retirement increases (DB) etc or (if DC) by investment gains.
Do you have any information at all among your papers about this pension?
It is quite possible that you may have been better advised to continue defer the state pension and draw the private pension.
With regard to pension contributions, even if you contributed £2880 to a SIPP, the pension provider would claim tax relief of £720 - you could draw the tax free lump sum, leave the rest within the pension, do the same in the next tax year......
http://forums.moneysavingexpert.com/showthread.php?t=5580163
doesn't only apply to the retired.0 -
liketoknow wrote: »I really have no clue what sort of pension it is, I've not thought about it for years. That works pension is still gaining interest as I have not touched it. Its the deferred part of the State pension which has stopped now that I have started receiving weekly payments.
I emailed the management company of the works pension a few weeks ago, asking about it, how much I would get if I took it in April and what happens to it if I die before I have claimed it. They just wrote back saying what would happen to it when I die and said that when I gave them a date of retirement, they could give me the figures. I had said I only wanted a rough idea. Without the figures, I wouldn't know if I wanted it yet.
A new management company is taking over at the beginning of April, so I will write to them and ask.
I think it could be drawn from 55 years old but not 100% sure.
I don't want Pension Credit yet as I am still working and will be for the forseeable future. That is also why I want to hang onto the works pension, I don't think I will be eligible for PC, but would be for Savings Credit with having the other pension.
I don't know where to look to see if my State pension has a contracted out deduction but I would assume so as I was paying into the works pension.
I had not thought about contributing into a pension scheme. I don't earn enough to pay tax anyway and even with my pension added to my earnings, I don't think I will. If I draw the deferred state pension as a lump sum, I will regulate my earnings in 2017/2018 so that I stay below the personal allowance and therefore not have to pay tax on it. Its just knowing what is best to do with it when I do draw it, I would like it to be earning some sort of interest otherwise there is no point in drawing it yet.
Stop dancing around the issue. If you dont know what type of pension it is, call the company you worked for or just tell us the name- then people will be able to tell if it was DB or DC.0
This discussion has been closed.
Categories
- All Categories
- 343.1K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.6K Spending & Discounts
- 235.2K Work, Benefits & Business
- 607.8K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards