Living off savings questions

Discussion in 'General Chat' started by Philly112, Feb 1, 2014.

  1. Philly112

    Philly112
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    Hi

    My position is that I probably have enough pension provision at around 57-58 to retire early. However, I have a reasonable amount of cash, and was wondering if there are any tax or other implications if I told my boss to swivel, and lived off my savings for a couple of years before then. I'm not saying I am going to do it, and I understand that I might get bored. I have contacts in the voluntary sector and can always do that. Or a day or two consultancy.
    But, if I just left and lived off my savings, do I still need to sign on etc?

    Many thanks
    Phil
     
  2. RBZ5416

    RBZ5416
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    Assuming you've already banked enough NI contributions for your state pension then you can do as you propose. No need to sign on.
     
  3. Philly112

    Philly112
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    Thanks. I'll actually be two years short of NI contributions if I go now as I will need 35 years, not the current 30. I was presuming that at 67 I'd just get 33/35 of the state pension. Is that correct? Or am I missing something here? Of course, I might possibly end up with another job for a few years at some point. I just want to make sure I've got the bases covered before I do anything I might regret!
    Cheers
    Phil
     
  4. RBZ5416

    RBZ5416
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    Not sure how a shortfall would work but there's a calculator here. You can always voluntarily top up NI from your savings if need be.
     
  5. wack

    wack
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    Bear in mind filling 24/7 will be more expensive than your free time while working

    Unless you plan on watching sky tv or building the empire state building out of matchsticks you'll spend more money
     
  6. jonna

    jonna
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  7. True Romance

    True Romance
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    All very depressing seeing how long I now have to work till :(
     
  8. Duncan G

    Duncan G
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  9. Tempest

    Tempest
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    I just ran that, and it says I have ALREADY paid enough in (years I have worked) to quality for the full state pension already!
    Does that mean if I've already paid in the max, I can stop paying something now?
     
  10. Phil57

    Phil57
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    No!!
     
  11. booyaka

    booyaka
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  12. Philly112

    Philly112
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    Thanks to everyone who has replied with advice etc. My actual position is that I am too young to sit on my bum for the rest of my life, but am lucky enough to have some savings and pension to enable me to live a reasonable life without doing the job I'm doing now. Which is a well paid job but just doesn't interest me any more. But if I left it, I wanted some reassurance that I could survive if I didn't find anything else to do.
    I have done some research and there are quite a lot of jobs around - provided you don't want to get paid to do them! So I would never be bored unless I wanted to be. I've just had enough of living in hotels, airplanes and general corporate BS.
    I can't actually go now, it'll be October at the earliest or May 2015 at the latest.
    All that remains is to tell the wife.
    Piece of cake.

    Phil
     
  13. x3j3UKN

    x3j3UKN
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    Envious.
     
  14. Peter Parker

    Peter Parker
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    Something I recently discovered, is that if you were contracted out of the additional state pension (usually because you were contributing to a works pension), you will not get the full amount even with 35 years of NI contributions.

    The amount of reduction seems to be vague with no definitive answers from anywhere, so the best thing to do is as has already been suggested, and to phone up the Government Pensions office and ask them for a written quote (give them your NI number). They will also tell you to ask again after April next year (when the NSP starts), this is because even the Pension office doesn't know how it will work yet.

    Gary
     
  15. SteveCritten

    SteveCritten
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    And what did @Philly112 end up doing after a year?
     
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  16. Peter Parker

    Peter Parker
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    Would be interesting to know. There doesn't seem to be many threads on here regarding this, so I thought resurrecting this one might be useful to some or I might start a new one.

    Something I found just now seems to suggest that people who were contracted out and have no additional/state pension contributions will still get the current equivalent basic state pension of £113.10 - according to Steve Webb the current pensions minister. It doesn't say if this will be index linked, though I assume it will be.

    I'm 31. Will there still be a state pension for me?: We put your questions to the pensions minister Steve Webb - Telegraph

    Gary
     
  17. soupdragon

    soupdragon
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    I was looking at my pension earlier this week funny enough. Apparently I'm only going to get £80 something a week due to paying into a final salary pension. I will potentially be paying tax and NI for 50 years and now I find out I won't get a full state pension. Lol! Not a problem though if you've been a sponger all your life, a full pension awaits, naturally :)

    On your payslip you will see a code beside your NI contributions. My code tells me I've been contracted out.
    Bit of a joke really but at 38 years of age, I'm planning for a state pension of zero. If I get £50 from state pension by the time I hit 77 or something silly then I'll consider that a bonus!
     
  18. Peter Parker

    Peter Parker
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    Hi Soup,

    Where did you get the £80 figure from? Was it a statement from the Pension office? In the link above, a woman teacher who has been contracted out all her working life got a state pension statement which she said was very low, but will be protected by the existing state pension rules so will get a state pension of £113. This is the least you will get under the new system apparently.

    I have been contracted out so I'm in the same boat. When I first started looking into the state pension on the government website I don't seem to remember any mention of there being a lower amount than then suggested £148 provided you had 35 years of contributions (which I already have). Now it says you will get a deduction depending on how many years you were contracted out.

    I'm lucky that I have a works pension, but it would be nice to get something back after working all your life and contributing into the system for a pension we were promised. Though like you, I wouldn't be surprised if by the time I come to ask for the state pension they will means test people who have work pensions/savings and not give them anything.

    Gary
     
  19. soupdragon

    soupdragon
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    I think it was actually a government website.... Filled in my DOB etc and then it asked for NI code and came out at £80 something pounds. Will check my browsing history to see if I can find the website when I'm next on my laptop...
     
  20. Peter Parker

    Peter Parker
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  21. SteveCritten

    SteveCritten
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    The thing is I thought if you were contrated out you pay less NI thats the whole point isn't it.
     
  22. soupdragon

    soupdragon
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    Problem is that you only pay a small fraction less yet you lose a huge portion of your state pension (seemingly)
    If for example I pay significant amount of NI over a 50 year working life, is it fair that I should get a reduced state pension?
    No point in losing any sleep over it at my age as it will no doubt it will be revised, changed, revised again by the time I hit retirement age. Not so good if your retirement is on the horizon and you've calculated a full state pension as part of your retirement income :(
     
  23. soupdragon

    soupdragon
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  24. Philly112

    Philly112
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    Well, Steve... I'm still employed, and am still reviewing the options! I didn't go in October 2014, and as I'm on 3 months notice I now can't go in May this year. However, I am negotiating with one of my customers to go and work for them 2-3 days a week (at a lower salary than now). This was something that came up at Christmas time and was unexpected, but it would be ideal for me. It's 50:50 at this stage as to whether they offer me the role - ideally they want a full time employee, which is of no interest to me. But I have the experience that they want. So we'll see. It's attractive to me as it would be at a salary that I would actually be retiring on (so I wouldn't be saving much out of it) but I wouldn't need to use any savings to live off. I have to admit that I wasn't expecting at my age to be looking for a new career (albeit part time) so it's thrown things up in the air a little.
    The interesting thing is that I can still probably go now. But knowing that I CAN go means that I don't feel so much pressure at work, if that makes sense.
    Apologies for not updating the thread I started!
     
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  25. SteveCritten

    SteveCritten
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    Nice position to be in though mate, I retire from my full time position at the end of June but I will have to work at least part time to make ends meet (pay for the luxuries at least). So a change of career is on the cards for me too. Time is flying by and I still don't have anything definite in place.
     
  26. SteveCritten

    SteveCritten
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  27. Philly112

    Philly112
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    Yes Steve, seems like we're similar. I also want to be sensible though, and ideally I should wait until the new pension rules have bedded in before making too many plans. I'd also like to see what the inevitable charges will be if start to go into drawdown May 2016 when I'm 55. So if I can stick this current job till then without either getting sacked or going crazy, that would be sensible. But starting a new lower paid part time job now would probably be the best overall, as I like the company, it would be something new so I'd be more stimulated and driven, and I'd probably carry on beyond 55 if I was enjoying it. Plus the salary would be fine for me to live on more or less as I do now - but without making the significant saving or pension contributions I do now of course.
     
  28. Miss Mandy

    Miss Mandy
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    I'm 34 years of age, have been paying NI since the age of 19 too, due to retire in 2048 and will get £67.
     
  29. soupdragon

    soupdragon
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    Gosh, that's not good. There must be something wrong with the calculator because if both of us have been paying since 19, why do we have different amounts?
     
  30. SteveCritten

    SteveCritten
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    No the calculator is fine it's just working it out on how many years you have paid but not paying any more till you retire.
     

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