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    • Syranara
    • By Syranara 4th Jan 18, 8:44 AM
    • 7Posts
    • 0Thanks
    Should I defer pension?
    • #1
    • 4th Jan 18, 8:44 AM
    Should I defer pension? 4th Jan 18 at 8:44 AM
    Morning everyone,

    I am due to receive both my State Pension and a small private pension later on in this year but I still have another 6 years to pay off my mortgage. My husband is already retired (State Pension only) so it falls on my wages to pay everything. I believe I must come to a decision about 4 months before pension is due so Iím already panicking over what I need to do as I don't want to get it wrong.

    I realise that in all probability I will have to continue working to pay this mortgage but should I defer my State Pension and if so, by how many years (the whole 6 years?) and what do I do about the private pension as, although small, it will be due and I donít believe I can defer it! I am also concerned that I had a major operation last year and there is also the fear that if anything goes wrong and I am ill that the mortgage will not get paid.

    Help please as I do not have a clue what to do and it is all down to me to get this right! My husband retired about 6 months after receiving his State Pension as he said it was all being snatched back in tax (his tax code dropped to about 164 if I am remembering correctly).

    Thank you.
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    • greenglide
    • By greenglide 8th Jan 18, 10:17 AM
    • 3,104 Posts
    • 2,020 Thanks
    But crucially with AA the requirement for help must be there irrespective of whether it is actually delivered or not and how much it costs.

    The claim form is quite straightforward if very repetitive.
    • LHW99
    • By LHW99 8th Jan 18, 2:45 PM
    • 1,322 Posts
    • 1,220 Thanks
    Do be careful if you draw any of the private pension - If you take more than the 25% tax free lump sum, you are restricted in the amount (£4k I think) you can add to a pension going foreward. That may not be an issue, but it is worth being aware.
    I don't think drawing the state pension triggers that, but others here will be able to confirm.
    • Linton
    • By Linton 8th Jan 18, 4:08 PM
    • 9,395 Posts
    • 9,529 Thanks
    If anyone is to defer their State Pension and your husband reached State Pension Age before April 2016 it is probably better for him to defer his pension than you defer yours. The benefit would be nearly twice as much.

    But I am not clear why you want to defer. As has been pointed out the extra income shouldnt put you into higher rate tax, but if it did that could be sorted with a bit higher pension contributions.

    Your husbands reason for stopping work doesnt make much sense to me. The drop in tax allowance simply happens because State Pension is paid tax free. The extra tax he would have paid is just the 20% of the SP (unless he was a higher rate tax payer). He would still have been 80% of the SP better off.
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