State pension ... Anyone nearly there?

Also take into account that the IR will take 40% of your private pension pot whichever way you decide to draw it down.
What do you base that on? My understanding is that 25% can be withdrawn tax free, after age 55 currently and the remainder at whatever is the appropriate tax rate, so assuming you draw down at retirement age and the state pension is about £3k less than the personal allowance you get that amount tax free i.e. approx £11k in total and the remaining draw down per annum at the 25% tax rate up to the next tax limit then you move into higher rate tax bracket.
Or have you found information to contradict that.
Matt
 
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What do you base that on? My understanding is that 25% can be withdrawn tax free, after age 55 currently and the remainder at whatever is the appropriate tax rate, so assuming you draw down at retirement age and the state pension is about £3k less than the personal allowance you get that amount tax free i.e. approx £11k in total and the remaining draw down per annum at the 25% tax rate up to the next tax limit then you move into higher rate tax bracket.
Or have you found information to contradict that.
Matt
That sounds about right to me. A work ate is retiring soon. He was going to retire next month but has been advised to hang on until April. That way his lump sum and pension won't get lumped in with what he has already earnt this year as he is already in the 40% tax bracket. He may initially pay 40% when he gets his money but once they realise he won't be getting that amount of money each week it will readjust and he will get a rebate.
 
That sounds about right to me. A work ate is retiring soon. He was going to retire next month but has been advised to hang on until April. That way his lump sum and pension won't get lumped in with what he has already earnt this year as he is already in the 40% tax bracket. He may initially pay 40% when he gets his money but once they realise he won't be getting that amount of money each week it will readjust and he will get a rebate.
That's so he gets it in the new tax year and can claim the allowance for next year as he has used this tax year's allowance. His lump sum could be taken this year though tax free if it was 25% or less, but I guess asking the provider to pay that and defer the regular monthly amount might be a bit complicated.
 
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:banana::banana::banana::banana::banana: I’m one of them old farts that have the vote ,keep working hard lads ,I fancy a new lens this year :banana::banana::banana::banana::banana:
 
What do you base that on? My understanding is that 25% can be withdrawn tax free, after age 55 currently and the remainder at whatever is the appropriate tax rate, so assuming you draw down at retirement age and the state pension is about £3k less than the personal allowance you get that amount tax free i.e. approx £11k in total and the remaining draw down per annum at the 25% tax rate up to the next tax limit then you move into higher rate tax bracket.
Or have you found information to contradict that.
Matt
Well you wouldn’t take tax advice seriously from someone who calls HMRC ‘“IR”. :p

My birthdays in Feb, there’s no way I’ll be ‘retiring’ at any birthday, I’ll hang on a couple of months into the new tax year ;)
 
That's so he gets it in the new tax year and can claim the allowance for next year as he has used this tax year's allowance. His lump sum could be taken this year though tax free if it was 25% or less, but I guess asking the provider to pay that and defer the regular monthly amount might be a bit complicated.
When Ford closed down the stamping plant I worked in there were lots of people that took voluntary redundancy as well as voluntary redundancy and early retirement combined if they were 55 and over. Ford made the lump sum payments in two instalments over two tax years to avoid higher rate tax. It does help that it is a Ford pension scheme as opposed to one run by an external company though.
 
I'm there next month with 48 years of contributions.
When I were a lad, my parents told me NI contributions funded your pension. Seemed to be accepted fact at the time.
I won't receive the full amount as one of my employer's schemes contracted me out for a number of years. (no choice).
I receive my pension at 65 as promised for many years.
My wife for many many years was promised her pension at 60. She has worked continuously since the age of 16.
She is one of the "WASPI's" and will be nearly 66 before a pension is paid. Friends who are 18 months - 2 years older than her received theirs at 60.

The pension system has been f----d about with by both parties over the years.
 
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Whilst I have some sympathy for your wife @Peter123 pension ages were always unfair without equalisation.

The idea that someone should retire earlier and live longer makes no sense at all.

And we’ve all been screwed, but it’s not the governments fault (of any persuasion) the only error they made was not acting earlier, it’s obvious that an ageing population puts pressure on pensions and the sex equality act was nearly 40 years ago.

Again the baby boomers got the rich pickings, leaving their grandkids the prospect of retirement duration of less than 10 years. Kids today will pay more than anyone historically and will get less in return.
 
Yes they should have staggered it over a longer number of years.
It was hardly a big jump though. There were generations where few women worked anyway. Once they had kids they stayed at home. It's only more recently , certainly around here anyway, that women have continued to work or return to work once kids are much older. There are obviously those that have never had a family and may well have continued working all their life.
But as Phil pointed out equality is nothing new going back over 40 years, yet it is only in recent years that the age of retirement was increased for women. How much more staggered could it have been. If your wife has been working long enough to qualify for a state pension, does she not have a company or private pension? She can still retire at 60, start getting those pensions and then wait a few years for the state pension to kick in.
 
No, no company or private pension.
Well to us, whilst we understand the reasoning, it still seems partially unfair. The jump was over a very short time scale.
Many thousands of people agree with this and in the recent parliamentary debate on this matter politicians from all parties agreed.
Nothing will be done about it by the present government (nor any future ones of whatever hue I expect).
 
The shift in Pension ages for men and women was always going to throw up anomalies that would be contentious.

My brother and his wife (a supply teacher) had determined their retirment on his state pension age of 65 and hers on he contracted 60th birthday. Both their rescheduled state pension has been moved to 67 so his take is that they have been screwed out of 7 years of pension.

The real ‘screw’ was my sister in law’s attempt to extend her contract with her agency. They were happy to give her a new contract but on a lower hourly rate.

So their take is they have been shafted, except they have not. She has gone to a different agency which pays a better rate and, offers a mileage rate for travel and the pension they will get, will be better in cash terms in the longer term.

I retired early because I coild afford to, they could too if they wanted.
 
you can fill in a BR19 and send it off, takes about 2 months but you will get a statement of how many years you have paid up. As a company director I do not pay direct NI as I pay a basic wage and pay into my private pension but because I pay myself less than 9k a year I still get my NI years stamped up and accumulated.

https://www.gov.uk/check-state-pension

not classed as an official doc if you print it yourself, might need it in years to come when gov try to diddle me.

Diddled how, you appear to have avoided paying any personal tax or NI, surely whatever you get you'll be getting for nothing ;)
 
Diddled how, you appear to have avoided paying any personal tax or NI, surely whatever you get you'll be getting for nothing ;)
Apart from the many 10s of 1000s I gave paid as a company director in corporate tax
 
Apart from the many 10s of 1000s I gave paid as a company director in corporate tax

if you paid that much corporate tax as a company director your company must have earned it.
I don't understand why you would think that not paying personal income tax & NI is OK!
most of us don't have the option or ability to avoid such taxes.
I cant help thinking that you are just winding up the real working class! or you really are that selfish or daft enough to admit it on these forums.
 
Apart from the many 10s of 1000s I gave paid as a company director in corporate tax
So, no personal tax then, that's tax avoidance, pure and simple. It's legal to do but morally questionable in my opinion.
 
Apart from the many 10s of 1000s I gave paid as a company director in corporate tax
Which you chose to pay rather than income tax and NI.
So the rest of us have paid your NI conts despite the fact you earned more than most of us. Forgive me for not sympathising with your tax bill, whilst I’ve been subsidising your conts.
 
Which you chose to pay rather than income tax and NI.
So the rest of us have paid your NI conts despite the fact you earned more than most of us. Forgive me for not sympathising with your tax bill, whilst I’ve been subsidising your conts.

Oh I agree and I wouldn't expect sympathy however some facts are facts.

Anyone can pay most of there earnings into a pension tax and NI free if they choose which I do, you Phil could do exactly the same.
People get on their high horse about the subject but that is what the government encourage people to do to save for their retirement, if you (the royal you) are not paying a pretty reasonable
part of your earnings into a pension nowadays you're pretty much a fruitcake.

I went for years paying all of my income in normal pay and attracting a lot of tax and remember as a company director you pay a lot more NI than mere permie mortals.

Now at 48 my mortgage is paid off I don't have many outgoings, me and mrs bump have a comfortable lifestyle, we have no kids, no pets, no major bills.

so why would I not pay as much money into my pension as I can stretch to?
Why would I choose to pay myself pay and attract Tax and NI to stockpile cash in the bank I do not need?
 
Oh I agree and I wouldn't expect sympathy however some facts are facts.

Anyone can pay most of there earnings into a pension tax and NI free if they choose which I do, you Phil could do exactly the same.

Most of us mere mortals actually need most of our earnings to actually live on.

Ivory towers spring to mind. ;)

And I feel lucky, being at the tail end of the baby boom, because my younger colleagues spend most of their income putting a roof over their heads.
 
Most of us mere mortals actually need most of our earnings to actually live on.

Ivory towers spring to mind. ;)

And I feel lucky, being at the tail end of the baby boom, because my younger colleagues spend most of their income putting a roof over their heads.

maybe that's so but folk like me that don't need all the money I earn shouldn't be chastised for using it in a more efficient way like pension.
Also as you say the amount of older couples popping out kids now well into their 40s who haven't even started a pension is scary.
 
Oh I agree and I wouldn't expect sympathy however some facts are facts.

Anyone can pay most of there earnings into a pension tax and NI free if they choose which I do, you Phil could do exactly the same.
People get on their high horse about the subject but that is what the government encourage people to do to save for their retirement, if you (the royal you) are not paying a pretty reasonable
part of your earnings into a pension nowadays you're pretty much a fruitcake.

I went for years paying all of my income in normal pay and attracting a lot of tax and remember as a company director you pay a lot more NI than mere permie mortals.

Now at 48 my mortgage is paid off I don't have many outgoings, me and mrs bump have a comfortable lifestyle, we have no kids, no pets, no major bills.

so why would I not pay as much money into my pension as I can stretch to?
Why would I choose to pay myself pay and attract Tax and NI to stockpile cash in the bank I do not need?

While technically true in theory, not in practice. There are government limits (£40k I believe) after which allowance charges or similar are put on the individual.
That aside, that's not what you are doing though. You are paying yourself less than the minimum wage (assuming a regular working week) to avoid paying income tax and NI at the correct rate, and if we take your comments at face value it begs the question why?

You have a comfortable lifestyle and are currently living on less than £700 a year more than you will receive on a state pension if the NI contributions are up to date. What are you going to do with all the pension you will receive, you'll be getting a substantial increase in income by the sounds of it, surely it'll end up stockpiled in a bank somewhere!
 
Oh I agree and I wouldn't expect sympathy however some facts are facts.

Anyone can pay most of there earnings into a pension tax and NI free if they choose which I do, you Phil could do exactly the same.
People get on their high horse about the subject but that is what the government encourage people to do to save for their retirement, if you (the royal you) are not paying a pretty reasonable
part of your earnings into a pension nowadays you're pretty much a fruitcake.

I went for years paying all of my income in normal pay and attracting a lot of tax and remember as a company director you pay a lot more NI than mere permie mortals.

Now at 48 my mortgage is paid off I don't have many outgoings, me and mrs bump have a comfortable lifestyle, we have no kids, no pets, no major bills.

so why would I not pay as much money into my pension as I can stretch to?
Why would I choose to pay myself pay and attract Tax and NI to stockpile cash in the bank I do not need?
So you are stockpiling a lot of your wages into a pension. I would imagine that pension will be quite an income when you retire. But as you don't need the money now, are you really going to need it then. Plus if for some unfortunate reason you should die early into retirement, you won't get to enjoy the benefit of it anyway.
I'd suffer some of the tax and insurance and enjoy some of the money now.
I have a final salary company pension so more fortunate than a lot of people, I don't see any point in paying more money into a pension. I just bung any spare money into an isa, it's there as extra tax free income for when I retire, money I can dip into should the need arise or spend if I want to treat my family or myself.
 
So you are stockpiling a lot of your wages into a pension. I would imagine that pension will be quite an income when you retire. But as you don't need the money now, are you really going to need it then. Plus if for some unfortunate reason you should die early into retirement, you won't get to enjoy the benefit of it anyway.
I'd suffer some of the tax and insurance and enjoy some of the money now.
I have a final salary company pension so more fortunate than a lot of people, I don't see any point in paying more money into a pension. I just bung any spare money into an isa, it's there as extra tax free income for when I retire, money I can dip into should the need arise or spend if I want to treat my family or myself.

Your right in what you say but I am retiring at 58 to my house in Greece so will need a good income until I get the additional at State Pension age 68 so the extra income is to bridge that 10 years so I can proper enjoy myself with Mrs Bump.
 
maybe that's so but folk like me that don't need all the money I earn shouldn't be chastised for using it in a more efficient way like pension.
Also as you say the amount of older couples popping out kids now well into their 40s who haven't even started a pension is scary.
You weren’t ‘chastised’, someone simply pointed out that you’d abused the system to specifically benefit yourself, and relied on the rest of us to top up your NI conts.

It was your decision to do that, you were proud of your ability to do it, but when called out you don’t like that some others may see it as morally wrong.

Your choice, and all choices have consequences, good and bad.
 
You weren’t ‘chastised’, someone simply pointed out that you’d abused the system to specifically benefit yourself, and relied on the rest of us to top up your NI conts.

It was your decision to do that, you were proud of your ability to do it, but when called out you don’t like that some others may see it as morally wrong.

Your choice, and all choices have consequences, good and bad.

I am not abusing a system I am working within the framework of the system very different.
I am proud of my ability to do that but only because I have lived with in reasonable means for many years.
Still in the same house I bought aged 25, finished the mortage a few years ago.
no flash cars on the drive.

Wiedly enough just like my parents did and other peoples parents before them, funny that.
 
I am not abusing a system I am working within the framework of the system very different.
I am proud of my ability to do that but only because I have lived with in reasonable means for many years.
Still in the same house I bought aged 25, finished the mortage a few years ago.
no flash cars on the drive.

Wiedly enough just like my parents did and other peoples parents before them, funny that.
What you see as something to be proud of, some will see as abuse. We’re entitled to think that. We’re paying your NI conts for you.
You’re entitled to ignore what we think ;)
 
Isn't that what the like of Starbucks, Apple etc. claim, and people in the Panama papers?

Pay what they're legally obliged to, but they know the laws inside and out so they're minimising their obligation
Isn’t it worse?
As far as I know, Starbucks are paying the NI conts of all their employees.

They’ve not arranged their tax affairs to ensure they pay no NI and that ordinary hard working people will be topping them up from their taxes.

A closer comparison would be the single parent deciding to have another child for us to pay for rather than going back to work.

I’m genuinely appalled that someone would be ‘proud’ that they’d worked out a way for hardworking poorer people to pay their contributions, meaning they can afford to retire early, whilst those contributing to his pension can’t afford to.
 
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I am retiring at 58 to my house in Greece

Good luck with their health care - or will you be coming back for any treatments you need later in life?
 
Good luck with their health care - or will you be coming back for any treatments you need later in life?
Private health care already have old chap
 
Isn’t it worse?
As far as I know, Starbucks are paying the NI conts of all their employees.

They’ve not arranged their tax affairs to ensure they pay no NI and that ordinary hard working people will be topping them up from their taxes.

A closer comparison would be the single parent deciding to have another child for us to pay for rather than going back to work.

I’m genuinely appalled that someone would be ‘proud’ that they’d worked out a way for hardworking poorer people to pay their contributions, meaning they can afford to retire early, whilst those contributing to his pension can’t afford to.
Perhaps we'll all get invited on a fortnight all expenses paid holiday in Greece in 10 yrs time by way of thanks for all our contributions on his behalf. ;)
 
Perhaps we'll all get invited on a fortnight all expenses paid holiday in Greece in 10 yrs time by way of thanks for all our contributions on his behalf. ;)

(we) have as much chance of that as him paying his UK taxes. :mad: :dummy: :popcorn:
 
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you have as much chance of that as him paying his UK taxes. :mad: :dummy: :popcorn:
I was inviting everyone else on his behalf too.
It seems he takes pride in everyone else doing stuff on his behalf, I thought I would take it a step further.
Shall we start working out the Rota now? ;)
 
I am not abusing a system I am working within the framework of the system very different.
I am proud of my ability to do that but only because I have lived with in reasonable means for many years.
Still in the same house I bought aged 25, finished the mortage a few years ago.
no flash cars on the drive.

Wiedly enough just like my parents did and other peoples parents before them, funny that.
What is the tax regime for pensioners in Greece? You might find that although you avoided UK tax and NI, I won't comment on the morality of your actions, you get caned for higher rate taxes when drawing your pension abroad.
Matt
 
So, no personal tax then, that's tax avoidance, pure and simple. It's legal to do but morally questionable in my opinion.

No it isn't tax avoidance, it's a very common and perfectly acceptable method for Directors to remunerate themselves. Corporation Tax is essentially a form of income tax after which dividends can be paid, which are still subject to further taxation depending on the value of the dividend. However, the recent changes with dividends do make it a less favourable system to use.

It is NI friendly, hence why it was so popular, but if it is morals being questioned then I would be questioning the morals behind the requirement for Employer's NIC first.

The fact that he has chosen to pump income into his pension, and bear in mind he can't access that money until the appropriate time without usually suffering penalties, is perfectly moral in my eyes and also the Government's eyes because not only do they openly encourage it but they have made it tax friendly to further encourage such. As already mentioned in this thread he will be taxed at the appropriate rates when he draws down on the pension depending on the values.

This is all very different from what Apple, Amazon etc are doing. What he is doing is seen as clever tax planning using fairly basic systems which are all very transparent and reported quite clearly to HMRC. What the big corps are doing is tax avoidance using nonsense loans, interest and complex webs of companies and accounts etc in order to try and conceal what's really going on. It would probably be called tax evasion if the Government and HMRC weren't so scared to upset them.

It's ridiculous to compare what he is doing to what Apple, Amazon etc are doing and whilst the employees may be paying their NIC do you think the Directors of these corporations will be paying all their Tax and NIC? Of course not, it will be done in the most tax efficient manner possible with no concern for morals.

I bet people proclaiming to be so morally righteous are still buying iPhones and ordering things from Amazon.
 
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I bet people proclaiming to be so morally righteous are still buying iPhones and ordering things from Amazon.

Absolutely because for most folks that is the only way tax avoidance is available to Joe public.
it still doesn't make it right!
but only a fool would think it nothing but canny buying when the government allows companies to manipulate the tax laws to suit.
 
...
It is NI friendly, hence why it was so popular, but if it is morals being questioned then I would be questioning the morals behind the requirement for Employer's NIC first.

...

I never commented on the tax avoidance angle, I know it’s a common practice.

My only issue is the smugness of someone who’s complaining that he might get ripped off on his pension, then admitting he’s not been paying into that pot at all.

So whilst he’s sunning himself in his early retirement (partly funded by the money he’s saved by not paying his way), the low paid nurses, teachers, bin men and minimum wage workers will be paying into his pension pot.

It might be legal, we all get to make our own decision about whether it’s morally OK.
 
I bet people proclaiming to be so morally righteous are still buying iPhones and ordering things from Amazon.

I have never bought an iPhone, nor do I intend to or any other Apple products for that matter. I very rarely buy anything off Amazon, usually because it can be found cheaper elsewhere.
 
I never commented on the tax avoidance angle, I know it’s a common practice.

My only issue is the smugness of someone who’s complaining that he might get ripped off on his pension, then admitting he’s not been paying into that pot at all.

So whilst he’s sunning himself in his early retirement (partly funded by the money he’s saved by not paying his way), the low paid nurses, teachers, bin men and minimum wage workers will be paying into his pension pot.

It might be legal, we all get to make our own decision about whether it’s morally OK.
I would suggest that those of us that are currently paying NI do not fully fund the current pension payouts, remember there never was an existing pot that funded pensioners, what we pay today isnt funding our future payouts, it's not invested but paid out now. So, given that, the current payouts are probably funded by a mixture of Ni and tax, as a company he will have paid a large amount of Corporation Tax if he hasnt paid himself much salary, there is no personal allowance for Companies, so every penny of "profit" is taxed. Some of the companies earnings were then paid into a pension fund, which he will draw and pay tax on at a later date. I would suggest his payments into the "system" would not be significantly different had he been paye or working through a limited company, the only difference would have been timing of those payments. Also bear in mind as a company director he wouldnt be entitled to any form of unemployment benefit should his company see its work dry-up, so he took a risk, for him it paid off, for some it didnt/wouldnt.
In truth if he reduced his income tax/NI liability it may have given him more disposable income, but whatever he bought with that income would have attracted some form of tax (VAT etc) or he put it away for a rainy day (pension) thereby reducing his reliance on government payouts again.
I dont personally have a problem with his behaviour, it was/is legal and he'll pay tax at a later date anyway, he may think he wont but I think he will.
 
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