Retiring

[squirtyflower]

Shit, I need to look into this then.

On the plus side if it is the lower rate then at least I am finding out at 52 and i have time to put things in place, i suspect there will be a lot of people who get to retirement age and get a nasty surprise.

Not necessarily mate.
if you retire at 67 then you will have put in at least 18 years of full contributions in.
I did some full contributions pre 1981 when I started my public sector job. Then 34 years at the lower rate followed by a further six at the higher rate.
So my NI contributions are for 46 years in total.
That is made up of 6 full years, then 34 part years and then another 6 full years.
State pension is based on the ‘best’ 35 years, therefore I have 12 years full and 23 years part which is estimated to give me £159 per week.

 

[squirtyflower]

Yes I certainly got a nasty surprise as I was expecting the full wack
If you decide to top your pension up really look into it as ,some have said on here they would have to live to 80 plus for it to be worthwhile.
I am no expert just stating what happened to me .Good Luck

Did you take your state pension before April 2016.

 

[AJ71]

My HMRC state pension forecast (online) says £175.20 per week £9141.69 per annum, which is the maximum and cannot be improved. I was contracted out and that estimates to be £21.67 per week. I assume this means my state pension will be reduced by £21.67 per week and I can't now do anything to increase that? The basis being that the £21.67 should be made up by the company pensions I was paying into at the time of being contracted out? I have 32 years NI contributions so will easily make the 35 years.

 

[hammocity]

Before packing in my former role (main job for thirty odd years) I kept a record of everything I spent in 12 months. I then deducted the things I wouldn’t be spending in retirement such as the £450 a month in petrol to drive to work, mortgage, kids at university etc
From that I could work out how much a month I would need to carry on in the same lifestyle as I didn’t want to give up on the things we were used to. Then factored the pension accordingly with some left over for emergencies.
We also downsized, although not as much as I wanted as the wife spent a fortune on doing the new house up!

Good idea to do the expense exercise, I think with mine and Mrs H state and small workplace pension we can have a decent if not extravagant lifestyle up to around mid 70's by drawing down the private pot plus the state pension. After that we will have the option of down sizing or taking equity release.

Made me laugh about the over budget on the new house, my best friend and his wife downsized late 2019, just got finished in summer and the budget went from 20 to 40k, he had been watching too many episodes of "Homes under the Hammer".

 

[abu13]

Not necessarily mate.
if you retire at 67 then you will have put in at least 18 years of full contributions in.
I did some full contributions pre 1981 when I started my public sector job. Then 34 years at the lower rate followed by a further six at the higher rate.
So my NI contributions are for 46 years in total.
That is made up of 6 full years, then 34 part years and then another 6 full years.
State pension is based on the ‘best’ 35 years, therefore I have 12 years full and 23 years part which is estimated to give me £159 per week.

This is where i need to check, I am 52 and have worked consistantly from 16 years old so that gives me 25 years, the first 3 or 4 years a was on low pay ( YTS & Apprentiship ) so i may not have paid full NI.

I opted out when I was about 22 and left the company a short time later, I have no idea how i sit with it now,

I'm not overly worried as my intention is to work to 65 as a minimum, 67 as a maximum. I have the house paid off and expect to have at least £220k in a company pension by 65. Wife has worked in a school for 25 years and has a pension through the council which should give her a decent boost. We don't have an extravagent life style and £25k a year in todays money would give us a good standard of living.

I should be ok, but admit that I am becoming a little obsessed with retirement planning at the moment,

 

[paulchapo]

Can anyone clarify, I am going to get the 35 years of NI contributions in easily, i only need another year and have another 15 years to go. i opted out of Serps many years ago. would i get the full £172 state pension, or would it reduce as i opted out?

No chance you will get the full state pension unfortunately. Opting out of Serps used to mean that the money you would have paid into Serps went into your private pension. In a way it was a swings and roundabouts agreement, you get less state pension but your private pension should prosper more. It was called contracting out but I think that it ceased being an option a few years ago but I may be wrong. The rules are so complex though and change from time to time. Until I delved into it I actually didn't even know my company pension had contracted out decades ago. I had no say in it at all. Like most people you just do your job and enjoy life, a pension is for old people until all of a sudden you realise that is you lol.

A better company/private pension is probably wise though. It is the only chance you have of retiring early. If you have to wait for the state pension you are looking at at least 67 now I think depending on your age. I would look at your private pension and savings providing the luxuries in life and your state one covering the basics, such as utility bills and food. With a mortgage paid off most people should cope okay unless they have very expensive hobbies or addictions.

I was fed up with working long shifts, travel and the stress of working. One day I sat down and worked out what I was working for aside from the basics. Two holidays a year, going to the match and odd nights out. I realised if I took early retirement I could stil do this so finishing work was a no brainer. Yes it meant dipping into my savings for the holidays and any other luxuries but this was only until my state pension kicks in, then I have that added. My decision was swayed by seeing around ten people in the company die before the age of sixty. All these were working towards this utopia of a relaxed enjoyable retirement but never reached it. If this covid situation has taught us anything it's nothing is guaranteed in life. Now even those nights in the pub, holidays abroad and going to the match are gone, so you could be earning 100 grand a year but there is nothing to spend it on. Live it now and live it fast. While it's sensible to have one eye on the future don't make that at the expense of enjoying the moment.

 

[cyberblue]

Did you take your state pension before April 2016.

No it was 2019 when I was 65 & 6 months

 

[squirtyflower]

No it was 2019 when I was 65 & 6 months

A young man.

 

[squirtyflower]

Good idea to do the expense exercise, I think with mine and Mrs H state and small workplace pension we can have a decent if not extravagant lifestyle up to around mid 70's by drawing down the private pot plus the state pension. After that we will have the option of down sizing or taking equity release.

Made me laugh about the over budget on the new house, my best friend and his wife downsized late 2019, just got finished in summer and the budget went from 20 to 40k, he had been watching too many episodes of "Homes under the Hammer".

It’s personal I know, but downsizing earlier releases your equity when you are young enough to go out and spend it, especially if you want to travel abroad.

Your best friend was very lucky. We have spent £170k and she still hasn’t finished!

 

[flook]

My HMRC state pension forecast (online) says £175.20 per week £9141.69 per annum, which is the maximum and cannot be improved. I was contracted out and that estimates to be £21.67 per week. I assume this means my state pension will be reduced by £21.67 per week and I can't now do anything to increase that? The basis being that the £21.67 should be made up by the company pensions I was paying into at the time of being contracted out? I have 32 years NI contributions so will easily make the 35 years.

thats pretty much my situation, and your understanding of the impact is the same as mine too.

On the plus side, I tracked down my private pension via the pension tracker on the HMG website (I think) and having found it, discovered it will pay me around 4 times what I lose from the state pension, and starting 2 years earlier too. I was only contracted out for about 2 years about 30 years ago, so the compounded growth on my contributions as a youngster must be significant