pensions and working

[smiley]

Hi all

A question I have been asked is it worth working and getting state pension. Something about defering pension and continue working.

Anybody know the pro's and con's good, bad.

the catches and holes to fall into.

 

[Terry_5112949]

As I approached pension age I made the decission to take my pension on a weekly basis as I was carrying on working full time, I pay more tax than before but do not pay national insurance as these cease after 50 years of working.

 

[Brailleman]

Hi Smiley

Although I'm not old enough to draw the state pension I have a couple of private pensions which I started drawing several years ago, even though I was still working. I was of the opinion that it is better in my pocket and bank account than any one elses. I did work out the relevant figures including the amount of tax I would have to pay and found that I would be far better off drawing it.

Another thing to take into consideration is that if, God forbid, you died suddenly, I think that your state pension dies with you, unlike private pensions, where most pay several years pension to your dependants.

 

[bill_374352895]

Hi Smiley,

In the deferred scheme you have a choice after one year,two,three,four or five. You can take a lump sum which has accrued, less tax at your highest rate, or an increased weekly pension. The lump sum is accrued at 2% above Bank of England Base rate. Currently as you know only 0.5%. If you don't need the income now why not take it and invest it in a monthly cash ISA (Risk averse) or a monthly Equity ISA for growth. If you die whilst deferring for a lump sum, your spouse will get the lump sum, not sure about deferring for a higher weekly pension. As has been said, if you die, your state pension dies with you. Remember what our Grandparents told us "A bird in the hand is worth two in the bush"

Bill

 

[smiley]

Thanks people, thats a good point isa's. Will pass on I know the lady who asked me only works part time so I don't think the tax would be that much, and as you say the pension disappears on death. Not that amyone likes to think about that.

So she can save tax free which will help to off set any tax.

 

[602]

Thanks people, thats a good point isa's. Will pass on I know the lady who asked me only works part time so I don't think the tax would be that much, and as you say the pension disappears on death. Not that amyone likes to think about that.

So she can save tax free which will help to off set any tax.

Hi,

Make sure you factor in the cost of going to work. Travel, clothes, eating away from home, etc.

Me? I retired at 45 on a small pension. But I had a wife with a good job. She eventually retired, and her income was halved...and suddenly we have more spare money than we have ever had. Difficult to work out why.

602