Pension Supplement

[heapsy]

Why wouldn't you take your state pension when you reach that age?

Plenty of reasons. I have RM Pension and private (SIPP) pension. I have little appetite to pay tax on pension income at State pension age so am trying as best as the crystal ball allows to tailor income from the SIPP. My Brother is in exactly the same situation but it it's much easier to work out for him (he's 64). I estimate he will preserve his State pension for about 3 years to avoid the tax. Of course the grim reaper may tax him...

Have a read of this. It doesn't seem worth it to me as it would take roughly 9.5 years just to break even. https://www.thisismoney.co.uk/money/pen ... silly.html" onclick="window.open(this.href);return false;

[stodgy88]

I presume the payment for working full time and part time years will vary ?

[stodgy88]

I presume the payment for working full time years and part time will vary.?

[heapsy]

I presume the payment for working full time years and part time will vary.?

Yes. It would be worked out on a pro rata basis. Less hours, less supplement.

[lordthornber]

Why wouldn't you take your state pension when you reach that age?

Plenty of reasons. I have RM Pension and private (SIPP) pension. I have little appetite to pay tax on pension income at State pension age so am trying as best as the crystal ball allows to tailor income from the SIPP. My Brother is in exactly the same situation but it it's much easier to work out for him (he's 64). I estimate he will preserve his State pension for about 3 years to avoid the tax. Of course the grim reaper may tax him...

Have a read of this. It doesn't seem worth it to me as it would take roughly 9.5 years just to break even. https://www.thisismoney.co.uk/money/pen ... silly.html" onclick="window.open(this.href);return false;[/quote

Think we may have crossed wires. Brother's reason is purely to stay within the personal allowance. He will be draining a works pension first + 2 older pension funds to the tune of the current 12:5k. When the works pension is emptied he will take the state pension + the 2 older ones, which should be near the 12:5k as near as dammit. God may gave a say in matters though :)

[freespeech]

Cheers FAB, I have the same number of years so I would get the same if I retired now?

My understanding is that this is NOT correct if you have been PT for the last 11 years. These are a calculation against FT so if you are on 50% of FT your entitlement would be 5.5 years (50% of 11 years).

[heapsy]

Why wouldn't you take your state pension when you reach that age?

Plenty of reasons. I have RM Pension and private (SIPP) pension. I have little appetite to pay tax on pension income at State pension age so am trying as best as the crystal ball allows to tailor income from the SIPP. My Brother is in exactly the same situation but it it's much easier to work out for him (he's 64). I estimate he will preserve his State pension for about 3 years to avoid the tax. Of course the grim reaper may tax him...

Have a read of this. It doesn't seem worth it to me as it would take roughly 9.5 years just to break even. https://www.thisismoney.co.uk/money/pen ... silly.html" onclick="window.open(this.href);return false;[/quote

Think we may have crossed wires. Brother's reason is purely to stay within the personal allowance. He will be draining a works pension first + 2 older pension funds to the tune of the current 12:5k. When the works pension is emptied he will take the state pension + the 2 older ones, which should be near the 12:5k as near as dammit. God may gave a say in matters though :)

"will be draining a works pension first " How will he manage that? If the pension pays until you die surely he can't?

[RobertT]

Why wouldn't you take your state pension when you reach that age?

Plenty of reasons. I have RM Pension and private (SIPP) pension. I have little appetite to pay tax on pension income at State pension age so am trying as best as the crystal ball allows to tailor income from the SIPP. My Brother is in exactly the same situation but it it's much easier to work out for him (he's 64). I estimate he will preserve his State pension for about 3 years to avoid the tax. Of course the grim reaper may tax him...

Have a read of this. It doesn't seem worth it to me as it would take roughly 9.5 years just to break even. https://www.thisismoney.co.uk/money/pen ... silly.html" onclick="window.open(this.href);return false;[/quote

Think we may have crossed wires. Brother's reason is purely to stay within the personal allowance. He will be draining a works pension first + 2 older pension funds to the tune of the current 12:5k. When the works pension is emptied he will take the state pension + the 2 older ones, which should be near the 12:5k as near as dammit. God may gave a say in matters though :)

"will be draining a works pension first " How will he manage that? If the pension pays until you die surely he can't?

A DC pension he's drawing down perhaps?

[heapsy]

Sounds like it. I wouldn't like to use it all up before drawing my state pension though.

[RobertT]

I suppose it depends on circumstances, as always.

Personally I have a DC pension which I plan to have drawn down by state pension age, most if not all of which should be tax free. The taking it out of the pension as tax efficiently as possible being the important thing, rather than actually spending it all within the same length of time.

[lordthornber]

Sounds like it. I wouldn't like to use it all up before drawing my state pension though.

It is of course a DC Pension. He has substantial other investments to support him if the Personal Allowance won't be enough in his later years. But as it stands it makes perfect sense to drain it, defer his State Pension and hopefully not die. God laughs at planners apparently...

[heapsy]

Sounds like it. I wouldn't like to use it all up before drawing my state pension though.

It is of course a DC Pension. He has substantial other investments to support him if the Personal Allowance won't be enough in his later years. But as it stands it makes perfect sense to drain it, defer his State Pension and hopefully not die. God laughs at planners apparently...

I understand. However, it will take a long time to claw back even one years state pension, around £8.5k. That was my point. I think I worked it out that if I deferred my state pension by 5 weeks, it would take around 100 weeks to break even.

[RobertT]

If you defer your state pension by 1 year, you'll get an extra £10.16 per week( https://www.gov.uk/deferring-state-pension/what-you-get" onclick="window.open(this.href);return false; ).

So assuming you qualify for the full rate(currently £175.20 per week/ £9,110 per year), it'll give you an extra £528 per year. Therefore the pay back time would be around 17 years, although inflationary increases over the years will reduce that.

More info: https://www.which.co.uk/money/pensions- ... r9w8p0f87w" onclick="window.open(this.href);return false;

[heapsy]

If you defer your state pension by 1 year, you'll get an extra £10.16 per week( https://www.gov.uk/deferring-state-pension/what-you-get" onclick="window.open(this.href);return false; ).

So assuming you qualify for the full rate(currently £175.20 per week/ £9,110 per year), it'll give you an extra £528 per year. Therefore the pay back time would be around 17 years, although inflationary increases over the years will reduce that.

More info: https://www.which.co.uk/money/pensions- ... r9w8p0f87w" onclick="window.open(this.href);return false;

I was well out. Still, not worth it really.

[stodgy88]

I ve been with royal mail 35 years ,but have been taking my pension for 9.5 years , planning on finishing around christmas aged 63 ,am i likely to receive the supplement thanks.