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My situation was that although I was with the LGPS for the majority of my working life, as the pension scheme was partially 'opted out', this means that I don't qualify for a full state pension.
But... a) this only matters if I'm still alive. b) I'm doing fine on the LGPS pension at the moment c) I can buy the 'missing' contributions ifI want a full pension.
The problem is, I'd have to live for so much longer before I would recover the value of the additional contributions, so it simply is not worth it in my case. YMMV.
I have more than 35 yrs of full NI contributions... but I still have to add a few more years in order to get the full pension (under the new, 35 yr scheme). I think this is because I may have been contracted out for a few years in the past. So I think @boogieman 's point 'a' is correct. However, I don't understand his point 'b'. I was under the impression that if one has got 35 yrs of full contributions - without any yrs contracted out - one qualifies for the full pension (under the new scheme) regardless of whether you give up work early or not.
The OP says he'd be getting state pension at 67 - I'm happy to be corrected but if he's 54 now won't his state pension age be 68?
Is it by any chance an LGPS scheme that you are in, or a private type?
For the others in this conversation, if it is an LGPS scheme, then this offers full index linking to pension benefits i.e. there is no upper limit or capping on the amount by which benefits will be increased in times of high inflation.
Then take a part time job that’s rewarding but not necessarily highly paid.
Thats my own plan...
There are lots of people who have to live on that and less and pay a mortgage and bills, bring up kids etc so if you cut your cloth accordingly £1.5k/month is pretty decent if you ask me.
Wow... full index linking! The benefits of a public sector pension! ;-)
Plus will have a few guitars that I will be selling
You can take out 25% of the value of the pension... without paying tax. You can either do that in one lump, or I think you can take it in stages (not sure of the details). Other monies you take out of your pension will be subject to income tax (along with pretty much any other income you have)... but the first £12,500 of income per annum is exempt from income tax.
So, if you were to take 25% of your pension pot in year one then that would be tax free. Anything taken in year two would then be taxed just like any other income. I don't think the £1200 p.a. tax-free you mentioned can be right (unless it's the amount required to bring your total income up to the tax threshold).
I think, generally, if you've got no other income... you could take £12,500 a year out of your pension and not have to pay tax ( I say generally because the taxman does also allow people to earn a small amount from hobbies or renting a room out. Not sure how much... but it's quite a small amount like £1k per annum maybe).
But remember, you can also take 25% out of your pension tax free (either as a lump or spread over multiple payments). I'm thinking I'd probably take the 25% out in one go... and then invest it (or spend it on guitars!).
• Youtube - https://www.youtube.com/@Goldeneraguitars
I was present at the last gasp of the now much villified 'public sector pension' that was designed to protect it's members in retirement & look after the interests of the majority of it's contributors.
This was the aspirational gold standard for years & it worked well, but apparently it was really a terrible communist plot. * need new emoji for really fucking angry*
There were many of us that worked steadily for low wages for years while paying generously into the system for all the right reasons.
I know lots of people that in the late 90's & early 00's that were persuaded to move out of the LGPS by Thatcher's wide boy sharks with promises of higher gains & sunny uplands.
They all without exception ended up poorer & pissed off. But that's greed for you * shrug* So, excuse me if I don't cry too many crocodile tears for those that abandoned the idea of a common good, for personal betterment.
Nor am I basking in smug assurance. I'm incredibly sorry for all those that had the ladder pulled up in front of their faces & I don't want it to be repeated. Same goes for access to housing, benefits etc.
Forgive me if I'm missing something... but your comment seems a bit harsh!
Not everyone gets to enjoy an index linked pension... despite years of making large contributions.
There aren't many final salary pensions left in the private sector... and I've never known of an index linked final salary pension in the private sector (ever). So I'm not sure who you're angry with here.
And "Nor am I basking in smug assurance. I'm incredibly sorry for all those that had the ladder pulled up in front of their faces & I don't want it to be repeated. Same goes for access to housing, benefits etc.'
I'm not angry at you or any individual. Sorry if it appeared that way.
I am however really, really angry at politicians over the last 40 years that have nodded through changes that systematically impoverish the majority whilst protecting & favouring the wealthy.