The contracted out thing has not gone!not quite, it's a little complicated but my understanding is that the contracted out thing is now gone from consideration, and as long as you contribute 35 years you get the max state pension. i contracted out for 2 years in the 90's, but I've paid in 38 years in total so I'm golden.....I think
On the other hand if you were CO for 10 or 15 years you'll struggle to hit the 35 year figure and hence will lose out on the state pension....again "I think"
How does this work? How do you get £700 added?If you're working then you can pay upto £40k into your pension and should be doing so. Even if you have no personal income as is the case with my wife, we pay £2800 into her SIPP and get the £700 added a coupld of months later. It's of no benefit to me as I'm through the LTA.
Thats not correct in every case, I'm not yet retired, was contracted out and will get full new state pension, according to the checker on the govt website, presumably as I will have still paid in the required 35 years contributions. The rules regarding contracted out changed (2016 ish?) - see also citizen of legoland and paulo chapo replies to my post for a better descriptionThe contracted out thing has not gone!
Anyone who has not yet retired and was ever contracted out will find they do not get the maximum state pension quoted.
The “ new” state pension figure will be for anyone who was never contracted out or can get 35 years in over their contracted out period.
Have you asked for an estimate of your state pension?
You can do it online.
How do you claim the 20%? Does someone do this for you?£2800 paid into a pension by a basic rate tax payer gets the 20% tax paid added in by HMRC so £3500 goes into the pot.
This true even for someone who has no income or earns under the tax threshold, so I pay into a pension for my Mrs and she gets tax relief on my money.
Yes. The pension company does.How do you claim the 20%? Does someone do this for you?
I did that online and it came back with my full entitlement, however someone posted on another thread is can be inaccurate, whats your take on that please.The contracted out thing has not gone!
Anyone who has not yet retired and was ever contracted out will find they do not get the maximum state pension quoted.
The “ new” state pension figure will be for anyone who was never contracted out or can get 35 years in over their contracted out period.
Have you asked for an estimate of your state pension?
You can do it online.
While it isn't an ideal solution the skills you have developed over the years may allow you to do the occasional work here and there after retirement in order to top up your earnings. I know what you mean regarding health issues though, my father in law wasn't able to work after 60 due to joint problems after 40 years of working in the building game.I wish , I a joiner and never earnt big money , had a personal pension since I was 23 and it’s only worth £126k . I’m nearly 57 and the maturity date is 2026 . Is is what it is but my only concern is my body , slowly getting fucked . Bad back ect . No way can I see myself working to ll in 67
Every case is different and very much lifestyle dependent, as you say if looking to take early retirement then there is a long period that has to be personally financed. I think sometimes people also forget that once they get to an income of over £12.5k inclusive of the state pension they also have to pay tax.I actually put 3% of my wages in and the company put in another 5.5%.
When I said I don't put much in, I mean there are other things that I could do that I choose not to because I'd rather balance living now (as many holidays a year as I can get - i.e. that's paying for 4 of us!).
e.g. you can choose a company option where you chuck in 8% and they''ll match it, but I think that's too much to sacrifice when there's stuff to pay for now (even though the mortgage is paid off).
Yes, I agree with that. £200K sounds about right. Whilst living in retirement is expensive, I do think trying to get people to put in massive chunks of their "free money" is often unrealistic and you probably need less as you pass 70, 75, 80 etc.
I aim to retire somewhere between 61-63 and about £120K-£150K will be to fund my life before I hit 67, with the remaining £180K-200K to supplement the state pension.
I think you may be mistaken with a tax free draw down, if you have taken the £80k up front then anything that remains is taxable.I'm not planning on paying much tax in the period between whenIi retire and when State Pension kicks in.
Ballpark figures: £320K pot and retiring 5 years before state pension age
25% lump sum tax free = £80K
Drawdown tax free amount each year, say £12K
Total = £140K for 5 years = £28K per year tax free.