Taking Pension at 55

[stephen500]

Additionally, if I left the business I would also get the pension supplement for the additional five years so if that is included it would take even longer than 15 years to be worse off. Given my retirement age is 67 it does seem sensible to retire at 55 as I would only be 12 years away from the state pension so this would be received three years before I was worse off.

Any thoughts?

If you retire at 55 you probably won't get a full state pension. Have you checked yours? I would suggest that you do before making any decisions based on state pension as we were contracted out of the higher state pension until April 2016. I have recently checked my state pension forecast and my estimate is only £154.43 per week even though it states that I have paid a full NI record for 43 years. I would have to work for another 4 years to qualify for the full state pension which is currently £175.20 and this is most definitely not in my plans. So it's quite a big drop when trying to survive off a lower RM pension due to taking it 5 years early.

I am retiring from RM at 59 years and 10 months and don't plan to work again, so I won't be paying Nat ins.
Currently I have reached £151.80 out of a possible £175.20 (if I carried on working and paid a full stamp, or made it up in contributions)
In reality, I don't plan either and my state pension will increase (as I am contracted back in) by £4.74 till Apr 20 and another £3.95 till Dec 20, bringing it up to £160.49.
No one ever told us about contracting out and it would have been a huge shock with a much smaller state pension.
As we contracted in again, at least I have recovered some of the losses.
Robert T once told me what was the cost of making up lost stamps/years.
Perhaps Robert could tell you. You could then decide whether to make your stamp up.

state pension.jpg

I think you'll probably find you'll get a bit more than you think, but not much more!

Your entitlement will have gone up by 3.9% this month – I'm not sure from your screenshot whether that's included, but if you've logged in this tax year, I assume it is?

Plus you'll have another 1/35th of the full rate added on for the 2019/20 tax year, so another £5.
And as long as you earn at least £6,240 in 2020/21 then you should earn another full qualifying year, giving you another £5.
So I make that a total, give or take a few pence, of £161.80.

A lot of people don't understand contracting out of the second state pension!
In practice it meant that your employers pension will be giving you at least as much as you would have got had you not contracted out.
So although many think they're being short changed, nobody should be worse off than they would have been under the old(pre 2016) state pension rules. And anybody who's earned state pension from 2016 will be actually be better off compared to the old system.

The cost of buying missing NI credits for 2019/20 was £15 for each week, or £780 for the whole year, which would give you an extra £5 per week state pension. Meaning a 3 year wait to get your money back, although factoring in inflation it's likely to be less.

The cost for 2020/21 is a bit higher at £15.30, but the cost of for previous years is lower. For most people buying missing NI credits is a good long term investment.

Thanks Robert, I didn't realise you got a full stamp for earning over £6K ish. So I will get a full year for my last 10 months.