Paying into and taking out a private pension
- Thread starter Mr Blob
- Start date
marty21
One on one? You're crazy.
I have a local government pension which I could claim in April when I turn 55 . I won't be retiring then though , I'll carry on. At 60 I can go for flexible retirement, you get your pension and work 3 or 4 day week and get paid for that.
Also pay into a private pension which pays out at 60 , it's a small one , maybe £100 a month , or more if I up my contributions over the next 5 years.
Also pay into a private pension which pays out at 60 , it's a small one , maybe £100 a month , or more if I up my contributions over the next 5 years.
It sounds like you've got a workplace pension not a private one. Is it a defined benefit (final salary) pension because, if so, it could be massively reduced if you take it early.
Even if it's not, taking it early could be a very bad idea -- it will limit the amount you can put into any further pensions.
Have you taken advice on this?
Even if it's not, taking it early could be a very bad idea -- it will limit the amount you can put into any further pensions.
Have you taken advice on this?
Idaho
blah blah blah
Not sure about this. The idea that you can work on your late 50s and early 60s and save up a meaningful pension amount send fanciful. You need to save more money earlier and let compound interest do the heavy lifting.
No, sorry, Mr Blob.
marty21
One on one? You're crazy.
True , the 2nd LG pension you get over the part-time working won't be great , but working full-time in your 60s ain't great either. Plenty of older colleagues are doing it , your income soars for the additional working years , pension + salary.
marty21
One on one? You're crazy.
Is that the Flexible pension I mentioned? You'd continue working for your current employer?
tony.c
Well-Known Member
I don't know about Local Government pensions, but in Royal Mail if you take your pension before 60 it is reduced by 5% for every year earlier. So if taken at 55 it would be reduced by 25%.
Also depending on your salary, adding in the pension might take you into the 40% higher tax rate, though you only pay the 40% on anything over the higher tax threshold, which is currently £37,500 pa.
Puddy_Tat
naturally fluffy
It's some years since i left local government work, but I have a feeling that there's a rule about how much you can earn if you carry on working and taking the pension. Think you're allowed to carry on in part time and / or lower grade work but not sure just what the rules are.
Within local government (and possibly related public sector work) that is. The rules may be different if you take work outside local government.
Also think that you'll get a better pension if you don't start taking it until you're 60 (or even 65)
Having said that, if you reach the stage where you've got the maximum number of years in (think it's 40 years service) then your pension won't increase after that point.
And not sure if you're allowed to take a LGPS pension and contribute to a second LGPS pension in another local government job. (I may be wrong on this)
Your employer should have a pensions contact office (some authorities pool their pension arrangements - I used to work in Lincolnshire, but my pension's in the west yorkshire scheme) - while they can't offer 'financial advice' as such, they ought to be able to clarify what the rules are.
isn't it 37,500 above the personal allowance - i.e. won't kick in until you're on (about) 50K a year? I doubt I'll ever get close enough to either to need to think about it...
Mr Blob
Well-Known Member
Finished with them two years ago. Temping now. I was with the employer I have Local Gov Pension with nearly 30 years
Mr Blob
Well-Known Member
Might die before normal retirement age in accident or quick illness. Like idea of life income going into my bank current account earlier even though reduced
Mr Blob
Well-Known Member
work pension is private pension like bank pension pays at 55 with most schemes. As opposed to State pension got to wait
I get 25% reduction on life pension. 14% reduction on lump sum. Normal age of retirement under LGPS rules that apply based on when I joined is 60
matter of personal choice. Friend retired at 55 on Civil Service pension. If i retired at 55 takes pressure off from more temp jobs. Just a temp job part of the year enough
Mr Blob
Well-Known Member
no mortgage on my home so early retirement desirable
StoneRoad
heckling from the back!
{my bold}
Answer - now, that means anyone working, you have to pay into a workplace pension not just the state one from your NI contributions.
Workplace pensions
Idaho
blah blah blah
Are you specifically more likely to die early more than anyone else?
A bank account is a terrible place to store money. I mean do whatever you like - but if you are coming into a forum with the intention of getting some feedback or advice - mine is that you are making a very poor choice.
planetgeli
There's no future in England's dreaming
Sorry but that sounds like you are saying paying into a workplace pension is compulsory. It isn’t. You can still opt out.
Puddy_Tat
naturally fluffy
dunno really. depends on your circumstances really. to some extent, any pension involves betting with the pension provider on how soon you'll fall off your perch.
While the 75% LGPS pension plus a bit of part time work at 55 will add up to X, it's also worth thinking about what 75% LGPS plus state pension at 65 (or whenever the state pension age is for you) will add up to compared to the alternative.
Is it a case of you have to take it at exactly 55 and if you don't then you have to wait to 60?
My general approach to things is to try and keep options open as long as possible.
I'm a few years off needing to think about this - and I didn't manage to stay in local government long enough for what I could get at 55 to make a big difference...
scifisam
feck! arse! girls! drink!
I have a private pension I started paying into when I was self-employed and still pay into. It won't pay out much, and I might well die young, but I've checked with them and the pension would continue paying out to my named beneficiary (not forever, but they'd get at least the value of the plan including the govt contributions), so it's still worthwhile.
StoneRoad
heckling from the back!
True, I missed the point that you can still opt out.
tony.c
Well-Known Member
I think the threshhold is currently £37,500 for higher tax rate (40%).
I took my pension at 60 and carried on working for another 2 years. My annual wage wasn't that high, about £25k, but taking my pension put my total income above the higher tax threshold which was about £35k at the time. I only had to pay the 40% tax on the amount over the £35k threshhold.
I didn't work overtime and could never understand why some colleagues who were taking their pension continued working overtime when they were paying 40% tax on it which meant they were working that overtime for about £6 per hour.
strung out
💩 🤣 🍆 💦 🧐 👻 🐝 🐈⬛
The 40% threshold has been £50k since April.
