Defer NRA 65 Pension or not?

[GW]

Will hopefully be in a position to retire next February at 63 but not sure whether I should taken my NRA65 pension then (2 years early) or defer it until I'm 65.
I have already taken my NRA60 pension plus lump sum so am planning to use those to live on until 65. I know that taking NRA65 2 years early will reduce it by 10% and am aware that on previous forums there is same debate as to how much the Cash Balance part will decrease but don't know whether it would be better to defer or not ?

Any ideas?

[NorthernBoy]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

[stephen500]

Will hopefully be in a position to retire next February at 63 but not sure whether I should taken my NRA65 pension then (2 years early) or defer it until I'm 65.
I have already taken my NRA60 pension plus lump sum so am planning to use those to live on until 65. I know that taking NRA65 2 years early will reduce it by 10% and am aware that on previous forums there is same debate as to how much the Cash Balance part will decrease but don't know whether it would be better to defer or not ?

Any ideas?

I am taking both early (NRA60 2 months early and NRA65 5 years and 2 months early) I don't really think you will even notice a 10% hit and as for the Cash balance scheme, I think at most I may have lost 3% per year for taking it early).
I take the view, I have had heart stents, I may have an expiry date of around 10 to 12 years and want to enjoy myself now.(I could live much longer, who knows!)
All this depends I suppose on the size of your pension and your outgoings and whether you have to pay rent or own your home.
I am using £57K of my lump sum divided by 7 to make up my income and have no plans to work.
I won't be paying tax on the pension income (until the state pension) and lump sum, we own our home.
You could take it year by year and decide whenever you want.
It all depends on your health and how long you think you have to go on this earth!

[stephen500]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

Also by taking it at 60, if you stop work, you won't be paying any tax to the government for at least 7 years (well except vat, oh and council tax, oh and tax on petrol and beer)

[heapsy]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

Also by taking it at 60, if you stop work, you won't be paying any tax to the government for at least 7 years (well except vat, oh and council tax, oh and tax on petrol and beer)

How do you know he wont pay tax? It all depends on the figures.

[freespeech]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

Also by taking it at 60, if you stop work, you won't be paying any tax to the government for at least 7 years (well except vat, oh and council tax, oh and tax on petrol and beer)

How do you know he wont pay tax? It all depends on the figures.

Yep, he won't pay NI (if this is his only income) but he may pay tax if payments are above his personal allowance.

[stephen500]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

Also by taking it at 60, if you stop work, you won't be paying any tax to the government for at least 7 years (well except vat, oh and council tax, oh and tax on petrol and beer)

How do you know he wont pay tax? It all depends on the figures.

Correct, I just assumed his pension would not be over the tax threshold of around £12500, Mine won't be. It will be around £11800. So I won't have to pay tax. except on my excess DBCBS of around £1100 as a one off payment.

[heapsy]

No right or wrong answer here, all down to personal choice.

If you need the nra65 money to live the type of retirement you want then I would say take it, if not and you are happy with your level of retirement income then maybe leave it. Remember you will get your state pension in a few years.

Personally I am taking all my nra65 at age 60 despite the reduction. I want as much money as possible when I am young enough to enjoy it.

Also by taking it at 60, if you stop work, you won't be paying any tax to the government for at least 7 years (well except vat, oh and council tax, oh and tax on petrol and beer)

How do you know he wont pay tax? It all depends on the figures.

Correct, I just assumed his pension would not be over the tax threshold of around £12500, Mine won't be. It will be around £11800. So I won't have to pay tax. except on my excess DBCBS of around £1100 as a one off payment.

Unlikely that my NRA60 will be over the tax threshold due to the pension closing and the fact I'm section C. I have a private pension which I'm hoping to draw down. With the lump sum from that, I should be able to get around 40% of the private pension tax free, before hitting 65. I'll take the rest over time, along with the NRA65. The new scheme when that is due, 67, and my state pension, whenever THAT happens. Knowing the government I'll be about 70 before I get that.

[NorthernBoy]

Unlikely that my NRA60 will be over the tax threshold due to the pension closing and the fact I'm section C. I have a private pension which I'm hoping to draw down. With the lump sum from that, I should be able to get around 40% of the private pension tax free, before hitting 65. I'll take the rest over time, along with the NRA65. The new scheme when that is due, 67, and my state pension, whenever THAT happens. Knowing the government I'll be about 70 before I get that.


What age are you now? As I think it’s just gone to 68 for people aged 49 and under but no further changes have been announced by the government

[heapsy]

Unlikely that my NRA60 will be over the tax threshold due to the pension closing and the fact I'm section C. I have a private pension which I'm hoping to draw down. With the lump sum from that, I should be able to get around 40% of the private pension tax free, before hitting 65. I'll take the rest over time, along with the NRA65. The new scheme when that is due, 67, and my state pension, whenever THAT happens. Knowing the government I'll be about 70 before I get that.


What age are you now? As I think it’s just gone to 68 for people aged 49 and under but no further changes have been announced by the government

I'm 53, pension age is 67.

[RobertT]

As I think it’s just gone to 68 for people aged 49 and under but no further changes have been announced by the government

The timetable for the increase of the state pension age to 68 which was announced in 2017 is currently only a proposed change. It hasn't gone through Parliament yet!

https://www.gov.uk/government/news/prop ... -increases" onclick="window.open(this.href);return false;

[NorthernBoy]

Unlikely that my NRA60 will be over the tax threshold due to the pension closing and the fact I'm section C. I have a private pension which I'm hoping to draw down. With the lump sum from that, I should be able to get around 40% of the private pension tax free, before hitting 65. I'll take the rest over time, along with the NRA65. The new scheme when that is due, 67, and my state pension, whenever THAT happens. Knowing the government I'll be about 70 before I get that.


What age are you now? As I think it’s just gone to 68 for people aged 49 and under but no further changes have been announced by the government

I'm 53, pension age is 67.

Heapsy, at 53, I don’t see your sp changing from 67.

However for any one in their 30s now, I can see a state pension age of 70 a real possibility.

[NorthernBoy]

As I think it’s just gone to 68 for people aged 49 and under but no further changes have been announced by the government

The timetable for the increase of the state pension age to 68 which was announced in 2017 is currently only a proposed change. It hasn't gone through Parliament yet!

https://www.gov.uk/government/news/prop ... -increases" onclick="window.open(this.href);return false;

Yeah legislation not gone through yet, but I don’t see why it won’t become law, government has large majority.

[RobertT]

I fully expect it to become law at some point, but it could be years yet. As there's absolutely no timetable in place for the legislation and isn't planned to take effect until 2037.

There's also a review planned by 2023 to determine whether the state pension age rises beyond 68. I agree that may mean a SPA of 70, or even higher, for those currently in their 30's or younger.

I'm also in my early 50's and don't expect my SPA to increase past 67.

[heapsy]

I hope I'm wrong, but something tells me the government might just nudge the state pension age up another year, in order to help pay for COVID.