Will the OAP exist for me?
Discussion
red_slr said:
To counter this we need to pay fewer people. That means, IMHO, SPA is going to creep up.
Yep - this has already been pre-empted by government. The SPA will be reviewed every 5 years and will be increased in line with average life expectancy (see page 4). It is already projected to reach 68 by 2044/2046https://www.gov.uk/government/uploads/system/uploa...
Moonhawk said:
I am not banking on getting a state pension. If one exists when (or if) I reach the qualifying age - then it will be a bonus.
I fully expect the state pension age to be pushed back further before I reach retirement age though (i'm early 40s now). It's currently projecting to be 67 - but I doubt it will stay there.
If I am drawing it before I reach 70 i'll be pleasantly surprised.
People are living longer and there is only a finite pot of money - something has to give.
Very similar with us I don't want to be working till 68 or 70 so am not relying on a state pension all my retirement planning is based on work pensions and other means. I fully expect the state pension age to be pushed back further before I reach retirement age though (i'm early 40s now). It's currently projecting to be 67 - but I doubt it will stay there.
If I am drawing it before I reach 70 i'll be pleasantly surprised.
People are living longer and there is only a finite pot of money - something has to give.
Edited by Moonhawk on Monday 6th March 08:34
having checked that link posted earlier I have been advised I can look forward to a state pension of £155 per week when I'm 68 (currently 55).
Glad I'm not relying on that!!
To the OP, I put, and continue to put, as much as possible into my private pension schemes. With the change of rules last year it is now just a tax efficient savings method, you have to keep an eye on what the plans are doing, but much better imho to have control of your own destiny than to rely on grubby back pocketing politicians to do anything other than look after no.1
Glad I'm not relying on that!!
To the OP, I put, and continue to put, as much as possible into my private pension schemes. With the change of rules last year it is now just a tax efficient savings method, you have to keep an eye on what the plans are doing, but much better imho to have control of your own destiny than to rely on grubby back pocketing politicians to do anything other than look after no.1
Like the person above its says state pension is £155 when I get to 67 in 13 years time.
It also says that my current contributions give me a pension of £142.
It then says that I need to contribute for 3 years out of the next 13 years to get £155
So question is can I pay NIC for the next 3 years ONLY and then stop. I run my own PAYE.
John
It also says that my current contributions give me a pension of £142.
It then says that I need to contribute for 3 years out of the next 13 years to get £155
So question is can I pay NIC for the next 3 years ONLY and then stop. I run my own PAYE.
John
Greenmantle said:
So question is can I pay NIC for the next 3 years ONLY and then stop. I run my own PAYE.
No - if you are still in employment, you only stop paying NICs when you reach state pension age.https://www.gov.uk/tax-national-insurance-after-st...
What you have to remember is that NICs go towards paying for public services in use today. They aren't funds paid into a pot for your retirement and hence can stop when it's 'full'.
Edited by Moonhawk on Monday 6th March 10:27
Thanks for the reply Moonhawk
I understand what you are saying but I will have to disagree.
I think that is no mechanism or incentive to continue NIC payments
The government will not take anything away so the reasons you described are moral issues.
My question was not a moral one but just a practical one.
Morally I agree with you and I wouldn't change my PAYE setup
I asked the question since I am aware of contractors who do not have a salary. All earnings are dividends.
Most of them have private pensions and are not reached full contribution status and are happy with that.
John
I understand what you are saying but I will have to disagree.
I think that is no mechanism or incentive to continue NIC payments
The government will not take anything away so the reasons you described are moral issues.
My question was not a moral one but just a practical one.
Morally I agree with you and I wouldn't change my PAYE setup
I asked the question since I am aware of contractors who do not have a salary. All earnings are dividends.
Most of them have private pensions and are not reached full contribution status and are happy with that.
John
Yes I understand that NIC isn't optional within the PAYE process
but PAYE is optional within a corporate / tax setup.
When you create a company and then register it with the HMRC you have to opt in to VAT and PAYE etc.
For example a friend of mine has created a new company and has registered with the HMRC so she is then liable for Corporation Tax. She then signed up for VAT as well but she didn't sign up for PAYE since the instructions online say do not until you are close to actually operating the company(RTI gets confused if it is too early). She is still over a month away from starting using the company. Therefore by this process she may choose never sign up for PAYE. Obviously she cannot then pay salaries.
John
but PAYE is optional within a corporate / tax setup.
When you create a company and then register it with the HMRC you have to opt in to VAT and PAYE etc.
For example a friend of mine has created a new company and has registered with the HMRC so she is then liable for Corporation Tax. She then signed up for VAT as well but she didn't sign up for PAYE since the instructions online say do not until you are close to actually operating the company(RTI gets confused if it is too early). She is still over a month away from starting using the company. Therefore by this process she may choose never sign up for PAYE. Obviously she cannot then pay salaries.
John
Greenmantle said:
Yes I understand that NIC isn't optional within the PAYE process
but PAYE is optional within a corporate / tax setup.
When you create a company and then register it with the HMRC you have to opt in to VAT and PAYE etc.
For example a friend of mine has created a new company and has registered with the HMRC so she is then liable for Corporation Tax. She then signed up for VAT as well but she didn't sign up for PAYE since the instructions online say do not until you are close to actually operating the company(RTI gets confused if it is too early). She is still over a month away from starting using the company. Therefore by this process she may choose never sign up for PAYE. Obviously she cannot then pay salaries.
John
But that's entirely different! Dividends are taxed differently.but PAYE is optional within a corporate / tax setup.
When you create a company and then register it with the HMRC you have to opt in to VAT and PAYE etc.
For example a friend of mine has created a new company and has registered with the HMRC so she is then liable for Corporation Tax. She then signed up for VAT as well but she didn't sign up for PAYE since the instructions online say do not until you are close to actually operating the company(RTI gets confused if it is too early). She is still over a month away from starting using the company. Therefore by this process she may choose never sign up for PAYE. Obviously she cannot then pay salaries.
John
Pensions worry / confuse me.
I think I will need to sort a pension pot out myself, but probably use a contributory scheme from whatever job I'm in at the moment - The problem is then transferring it whenever you leave or move companies I guess it can get confusing.
The other option is just to whack money into a separate account.
As much as I hate it because it's selfish and f
ks up younger peoples hopes of buying, property is probably the best pension you can get.
A couple of properties netting £800-£1k rent PCM and you are laughing.
I think I will need to sort a pension pot out myself, but probably use a contributory scheme from whatever job I'm in at the moment - The problem is then transferring it whenever you leave or move companies I guess it can get confusing.
The other option is just to whack money into a separate account.
As much as I hate it because it's selfish and f
ks up younger peoples hopes of buying, property is probably the best pension you can get.A couple of properties netting £800-£1k rent PCM and you are laughing.
simple answer is if you pay salary then you have to pay NIC. Although if the salary is low enough the NIC contribution doesnt kick in. That's what contractors do with their limited companies, although most pay the bare minimum to get the NIC covered for basic pension contributions.
You can of course never pay any salary but you're likely to be investigated by HMRC if you do that.
My plan is when I retire to stop taking a salary from my ltd company and just take dividends, although that has been tightened up in last years budget so I'll have to take less out over a longer period to avoid the excess tax.
You can of course never pay any salary but you're likely to be investigated by HMRC if you do that.
My plan is when I retire to stop taking a salary from my ltd company and just take dividends, although that has been tightened up in last years budget so I'll have to take less out over a longer period to avoid the excess tax.
DoubleTime said:
Additionally, as far as I'm aware, if you decided to retire at the gov approved age and say adios with a big smile on your face and take off to a nice and sunny climate such as the Philippines or Thailand the fkers freeze your pension at the rate when you leave. No further increases like you would receive if you stay in cold/expensive UK.
Which is nice.
Talk about a Piss take.
I think that's perfectly fair to be honest. The vast majority of pensioners income goes straight back out to the economy through the purchase of essentials - which in turn generates taxation and on the cycle goes. All that is lost the minute you fkers freeze your pension at the rate when you leave. No further increases like you would receive if you stay in cold/expensive UK. Which is nice.
Talk about a Piss take.
k off abroad.Have you seen the size of the trade deficit the UK has? Taking the above option adds to it.
keirik said:
simple answer is if you pay salary then you have to pay NIC. Although if the salary is low enough the NIC contribution doesnt kick in. That's what contractors do with their limited companies, although most pay the bare minimum to get the NIC covered for basic pension contributions.
You can of course never pay any salary but you're likely to be investigated by HMRC if you do that.
My plan is when I retire to stop taking a salary from my ltd company and just take dividends, although that has been tightened up in last years budget so I'll have to take less out over a longer period to avoid the excess tax.
yes exactly thisYou can of course never pay any salary but you're likely to be investigated by HMRC if you do that.
My plan is when I retire to stop taking a salary from my ltd company and just take dividends, although that has been tightened up in last years budget so I'll have to take less out over a longer period to avoid the excess tax.
why I wanted to prolong this discussion was that my parents have both full state pensions and varying company pensions but they never spend their company pensions since they can live off their state pensions. When I checked on my state pension I was pleasantly surprised to find that I only need 3 years more contributions to receive the full state pension when I have another 13 years of work to go. As someone else mentioned above and which I believe is true the NIC system is just a ponzi scheme. Our payments now are for the current recipients of the state pension.
John.
To the OP I'd simply treat the state pension as a bonus given your age. Unless you spend a lifetime on benefits make your own provision assume nothing from the state.
Whatever you do your pot will not be big enough!!
xjay1337 said:
Pensions worry / confuse me.
I think I will need to sort a pension pot out myself, but probably use a contributory scheme from whatever job I'm in at the moment - The problem is then transferring it whenever you leave or move companies I guess it can get confusing.
The other option is just to whack money into a separate account.
As much as I hate it because it's selfish and fks up younger peoples hopes of buying, property is probably the best pension you can get.
A couple of properties netting £800-£1k rent PCM and you are laughing.
I can see then worrying you, but shouldn't confuse you. It's simple, whatever you do the objective is the same maximize income in retirement. There are a number of different ways to do this & a combination of methods is probably the way forward. I expect to see us moving more towards asset based taxation so what works today in laying down assets for the future may not be effective tomorrow. Company based schemes can be very effective at present if the company matches your contributions & you pay any income tax. ISA's will be very effective long term in providing tax free income, but you are contributing out of taxed income.I think I will need to sort a pension pot out myself, but probably use a contributory scheme from whatever job I'm in at the moment - The problem is then transferring it whenever you leave or move companies I guess it can get confusing.
The other option is just to whack money into a separate account.
As much as I hate it because it's selfish and f
ks up younger peoples hopes of buying, property is probably the best pension you can get.A couple of properties netting £800-£1k rent PCM and you are laughing.
Whatever you do your pot will not be big enough!!
xjay1337 said:
A couple of properties netting £800-£1k rent PCM and you are laughing.
Unless they're empty. Or need repairs. Or the government change how BTL income is taxed. Or... or... or...You can't sell the properties either, or you'll have to pay CGT on that, and presumably be unable to replace them like for like at the time, so you'll take a big dent in your capital if you decide you'd prefer an annuity.
I have no pension to speak of other than the state, but will have a few modest rental properties mortgage-free by retirement age. I'm not sure it's such a great idea. It's certainly not laughing.
EDIT: Yeah, what Rob said ^^
TartanPaint said:
xjay1337 said:
A couple of properties netting £800-£1k rent PCM and you are laughing.
Unless they're empty. Or need repairs. Or the government change how BTL income is taxed. Or... or... or...You can't sell the properties either, or you'll have to pay CGT on that, and presumably be unable to replace them like for like at the time, so you'll take a big dent in your capital if you decide you'd prefer an annuity.
I have no pension to speak of other than the state, but will have a few modest rental properties mortgage-free by retirement age. I'm not sure it's such a great idea. It's certainly not laughing.
EDIT: Yeah, what Rob said ^^
TartanPaint said:
Unless they're empty. Or need repairs. Or the government change how BTL income is taxed. Or... or... or...
I have no pension to speak of other than the state, but will have a few modest rental properties mortgage-free by retirement age. I'm not sure it's such a great idea. It's certainly not laughing.
Well if you're NOT getting at least 60% of the achievable gross rent after all costs and contingencies including full management and before tax then something's not right. I have no pension to speak of other than the state, but will have a few modest rental properties mortgage-free by retirement age. I'm not sure it's such a great idea. It's certainly not laughing.
In this ZIRP/NIRP era can pensions really grow enough to provide a decent future income? If these conditions don't change can anyone grow a significant pot?
It's been reported by some on here that their pots have year on year decreased, not the end of the world after perhaps years of steady increases but what if you've just started to put into a pension and then this goes on for years?
Are pension companies being forced to invest in higher risk/more volatile things or just stay safe and try to maintain their clients balances?
The commonly held view is that over time it'll return to normal interest rates etc, but it seems to me that globally everyone gets twitchy over even portions of a % increase!? so what hope is there of a return of upwards of 4%?
Basically can a pension grow well in the current financial environment?
basically this http://www.mauldineconomics.com/frontlinethoughts/...
It's been reported by some on here that their pots have year on year decreased, not the end of the world after perhaps years of steady increases but what if you've just started to put into a pension and then this goes on for years?
Are pension companies being forced to invest in higher risk/more volatile things or just stay safe and try to maintain their clients balances?
The commonly held view is that over time it'll return to normal interest rates etc, but it seems to me that globally everyone gets twitchy over even portions of a % increase!? so what hope is there of a return of upwards of 4%?
Basically can a pension grow well in the current financial environment?
basically this http://www.mauldineconomics.com/frontlinethoughts/...
Edited by Scootersp on Monday 6th March 13:40
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