Pension at 55

[NorthernBoy]

I'm looking at using the max lump sum of around 40k to supplement my pension of around 8k per year giving me 12k per year for the next 10 years at which point my state pension will kick in.
Looked at my outgoings in last 3 years which average around 12k a year and as I've no dependants or mortgage I'm lucky enough not to need the 20k a year currently earning. I also have savings to cover home repairs, car etc and I live quite a frugal life style.
Think I'll apply for the pensions and as soon as they start coming through I'll call it a day.
You can wait for ever for VR and it may not happen, best to get out while you're still reasonably healthy...

I am looking at doing the same. Will take the maximum lump sum at 60 and divide this by 84 months and then add this to my main pension. This will even out my income and should be enough until my state pension kicks in at 67

Did think about taking the pension at 55, but personally I am not prepared to take the 25% reduction. However, I can see that for some people taking the pension early may be the right option for them, it’s all down to personal circumstances and there is no one size fits all for pensions.

[freespeech]

Interesting comments which highlight one definite, all our needs are different. The one thing I think we can agree on though is taking any form of pension and paying tax - working or not. Barmy indeed!

The problem is, if you intend to work after 60, you are now effectively forced to do that as there is no advantage in NOT taking your NRA60 benefits at 60. Obviously, when you do you will be paying tax on all of it assuming your normal job pays more than the £12500 tax free amount.

[Steve_claret]

Interesting comments which highlight one definite, all our needs are different. The one thing I think we can agree on though is taking any form of pension and paying tax - working or not. Barmy indeed!

The problem is, if you intend to work after 60, you are now effectively forced to do that as there is no advantage in NOT taking your NRA60 benefits at 60. Obviously, when you do you will be paying tax on all of it assuming your normal job pays more than the £12500 tax free amount.

I'm due to get my NRA60 next month but intend carrying on working for a few more years yet so as you say you have no option but to take the 20% hit on your pension payments. The only option not to pay any tax would be to fully retire at 60 and unfortunately for me and a lot of other people this isn't an option.

[Schiff]

Interesting comments which highlight one definite, all our needs are different. The one thing I think we can agree on though is taking any form of pension and paying tax - working or not. Barmy indeed!

The problem is, if you intend to work after 60, you are now effectively forced to do that as there is no advantage in NOT taking your NRA60 benefits at 60. Obviously, when you do you will be paying tax on all of it assuming your normal job pays more than the £12500 tax free amount.

I'm due to get my NRA60 next month but intend carrying on working for a few more years yet so as you say you have no option but to take the 20% hit on your pension payments. The only option not to pay any tax would be to fully retire at 60 and unfortunately for me and a lot of other people this isn't an option.

You can still avoid some tax by paying the net receipts from your NRA60 pension into another SIPP pension.

Say you get £5000 NRA60 per year but only £4000 after tax. Set up a SIPP pension and pay in the £4000. You will get tax relief on this so your new pension pot will get the full £5000. If you plan to fully retire some time before state pension age then you can draw down your pot to best utilise your full tax allowance each year. Also 25% of your new pot could be taken as a TFLS.

[tpost]

I am 55 and have just had a quote for 35 years service. It was a £45k lump sum and a annual pension of £8k if I left the business. If I stay employed by RM the annual pension is reduced to £6.8k as the supplement is removed. The figures do not include my payments from April 2018 to the present in the dcbs scheme which is about 7.6k or avcs of £17k which I have built up. I have got to be honest I’m very tempted to take it And leave RM

[heapsy]

I am 55 and have just had a quote for 35 years service. It was a £45k lump sum and a annual pension of £8k if I left the business. If I stay employed by RM the annual pension is reduced to £6.8k as the supplement is removed. The figures do not include my payments from April 2018 to the present in the dcbs scheme which is about 7.6k or avcs of £17k which I have built up. I have got to be honest I’m very tempted to take it And leave RM

35 years service? Are you sure you get a supplement? As far as I know it didn't start until section C came in 1st April 1987, by which time you'd already started so wouldn't get one.

[tpost]

I am 55 and have just had a quote for 35 years service. It was a £45k lump sum and a annual pension of £8k if I left the business. If I stay employed by RM the annual pension is reduced to £6.8k as the supplement is removed. The figures do not include my payments from April 2018 to the present in the dcbs scheme which is about 7.6k or avcs of £17k which I have built up. I have got to be honest I’m very tempted to take it And leave RM

35 years service? Are you sure you get a supplement? As far as I know it didn't start until section C came in 1st April 1987, by which time you'd already started so wouldn't get one.[/quote


I joined in 1988 but transferred a personal pension in to the scheme which bought me back about 4 extra years and there was money left over which went into an AVC. The supplement is shown on the estimate I have received from capita.

[freespeech]

I am 55 and have just had a quote for 35 years service. It was a £45k lump sum and a annual pension of £8k if I left the business. If I stay employed by RM the annual pension is reduced to £6.8k as the supplement is removed. The figures do not include my payments from April 2018 to the present in the dcbs scheme which is about 7.6k or avcs of £17k which I have built up. I have got to be honest I’m very tempted to take it And leave RM

35 years service? Are you sure you get a supplement? As far as I know it didn't start until section C came in 1st April 1987, by which time you'd already started so wouldn't get one.[/quote


As far as I am aware the supplement is paid for the period between leaving RM and taking your state pension.

[tpost]

I am 55 and have just had a quote for 35 years service. It was a £45k lump sum and a annual pension of £8k if I left the business. If I stay employed by RM the annual pension is reduced to £6.8k as the supplement is removed. The figures do not include my payments from April 2018 to the present in the dcbs scheme which is about 7.6k or avcs of £17k which I have built up. I have got to be honest I’m very tempted to take it And leave RM

35 years service? Are you sure you get a supplement? As far as I know it didn't start until section C came in 1st April 1987, by which time you'd already started so wouldn't get one.[/quote


As far as I am aware the supplement is paid for the period between leaving RM and taking your state pension.[/


I joined in 1988 but transferred a personal pension in to the scheme which bought me back about 4 extra years and there was money left over which went into an AVC. The supplement is shown on the estimate I have received from capita.

[FAB]

Any pension transfered into the scheme from another company does gets it part of the supplement paid regardless of whether you leave RM or not. And also stops at your State pension age.

[Fatboyslim]

Sorry, ex staff only pop in here now and again.

I took VR at 54 (55K) I think I was the last to get it offered where I worked. Lived off it for a year. Drew 500pcm. 35 years service. 54K lump sum roughly 8600 a year. Took whole of my 60/65 pension plus max lump sum at 55. Missus retired early too. She has a better pension than mine. So, I gave her my tax allowance to save her tax. So, we both win. Got three years backdated. No mortgage/dependants now. No loans/finance. I'm nearly borderline tax wise if I wanted to work - and I do not. No person/couple are alike. But, it works for us. I've been gone well over 3 years now. Flogged my shares/claimed tax refund on VR. Most of VR/Lump sum still in bank.

We know either partner would still get 50% on either death. So, we would be fine. We live a quiet life. Like I say, no two persons are alike. It works for us very nicely though. Good luck if anyone decides to take the plunge. The shifts/job was slowly killing me. I couldn't do them. I was gonna just walk out at 55. But, getting VR at 54 made my mind up.

[fosal29]

Sorry, ex staff only pop in here now and again.

I took VR at 54 (55K) I think I was the last to get it offered where I worked. Lived off it for a year. Drew 500pcm. 35 years service. 54K lump sum roughly 8600 a year. Took whole of my 60/65 pension plus max lump sum at 55. Missus retired early too. She has a better pension than mine. So, I gave her my tax allowance to save her tax. So, we both win. Got three years backdated. No mortgage/dependants now. No loans/finance. I'm nearly borderline tax wise if I wanted to work - and I do not. No person/couple are alike. But, it works for us. I've been gone well over 3 years now. Flogged my shares/claimed tax refund on VR. Most of VR/Lump sum still in bank.

We know either partner would still get 50% on either death. So, we would be fine. We live a quiet life. Like I say, no two persons are alike. It works for us very nicely though. Good luck if anyone decides to take the plunge. The shifts/job was slowly killing me. I couldn't do them. I was gonna just walk out at 55. But, getting VR at 54 made my mind up.

How does getting a tax refund on a VR work? I'm hopefully taking VR in 2 weeks. Am i right in thinking that this would only apply to the PILON and if it gets paid this financial year i can not claim it back but if is was paid after April 6th i may be able to. I don't intend working & have no other income. My letter says it will be paid within 6 weeks of my last day which is March 28th.

[Fatboyslim]

I contacted HMRC about this. Now this was 3 years ago so might have changed. Hopefully still the same.

On VR payments it’s everything over 30K. It’s added to your wages. Basically I got shafted tax wise. I knew this though. But, I had called IR previous and they said I’d be ok. And true to their word I was. I’m unsure about PILON payment tax wise though.

On your last day you will be given a P45. Keep it safe. Providing it is before April the 5th you should be ok. Call them immediately to put you on the system. After 35 days contact HMRC again as you will need their address. It’s an odd address with a BX postcode. You ask for a tax rebates form appertaining to redundancy as its classed as a one off payment. You send parts 2&3 with form.

Providing you don’t work between your finishing date, and the end of the financial year, in your case barely over a week you should be fine. It worked in my case. I got a nice fat cheque about 10 days after I applied. I left in a January. But, it should still work for you. Most important thing it to call them ASAP.

Good luck money is better off in your pocket.

I’m not prying about your finances/situation. But last year we were watching Martin Lewis money show. I’m married non tax payer. My missus pays tax on her pension. I gave her some of my unused allowance. It works. Backdated first three years too.

Good luck.