Retire early (living off savings)

Retire early (living off savings)

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Discussion

200Plus Club

10,676 posts

277 months

Thursday 18th January 2018
quotequote all
We are having fun and games at the minute with HMRC with regard to the state pension. the wife has gaps when she worked part time in her contribution records. you can apply to pay off the missing years, to boost the state pension you get at 67 etc. shes done the calcs, written a letter and sent a cheque to cover the full amount for her missing 9 years to get almost toward full entitlement. it will boost it from £108 pw to £140 or similar.
the original letter /cheque went in october, with a request for them to inform us when updated and accepted. shes since rung on 4 occasions and been told its in the system, a manager is dealing with it, and it will be sorted after new year due to how busy they are. her last call confirmed they had the letter and it was logged on the system. (December)

she got a letter last week saying they have no record of the cheque, and to advise the bank to cancel it, and to start again. annoying and worrying.

Tony427

2,873 posts

232 months

Thursday 18th January 2018
quotequote all
Re Pension, just be aware that its more likely than not that you were "contracted out" ( it appears most employees were) of SERPS which leads to a reduced pension entitlement.

This has significantly impacted my wife's state pension as both her last employers ( both very large organisations) contracted out the workforce and we are presently enquiring just how much extra we can pay now to bring her contributions up to the level that she needs to geta full state pension.

The poor dear will have worked for 46 years paying NI all the time but at a reduced contracted out amount. Even if she continues to work paying in NI at her current level and retires in another 5 years her NI contributions would still not entitle her to a full state pension. 51 years of continued service to the NHS and further education and she still doesn't get a full NI pension.

It's scandalous.

Luckily, I paid serps, thus was contracted in , ran a private pension into which all my pension pot has been transferred and once I reached the 35 years NI payment qualification I have never paid another penny in NI and never intend to.

Check those State pension entitlements everyone.

Cheers,

Tony




Porridge GTI

300 posts

101 months

Thursday 18th January 2018
quotequote all
Several mentions of selling the large family home to free up cash for retirement. There's an argument for that but consider first renting it out to see whether those six months per year in SE Asia etc are really what you want to do next. We might keep our gaff indefinitely and jet about on the rental income. Nice to know it's always there if you need it.

anonymous-user

53 months

Friday 19th January 2018
quotequote all
Tony427 said:
Re Pension, just be aware that its more likely than not that you were "contracted out" ( it appears most employees were) of SERPS which leads to a reduced pension entitlement.

This has significantly impacted my wife's state pension as both her last employers ( both very large organisations) contracted out the workforce and we are presently enquiring just how much extra we can pay now to bring her contributions up to the level that she needs to geta full state pension.

The poor dear will have worked for 46 years paying NI all the time but at a reduced contracted out amount. Even if she continues to work paying in NI at her current level and retires in another 5 years her NI contributions would still not entitle her to a full state pension. 51 years of continued service to the NHS and further education and she still doesn't get a full NI pension.

It's scandalous.

Luckily, I paid serps, thus was contracted in , ran a private pension into which all my pension pot has been transferred and once I reached the 35 years NI payment qualification I have never paid another penny in NI and never intend to.

Check those State pension entitlements everyone.

Cheers,

Tony
My wife had a shortfall, until we pointed out that she was in receipt of child allowance for a long period, which they hadn’t counted (you get credits while getting child allowance)

FocusRS3

3,411 posts

90 months

Friday 19th January 2018
quotequote all
Jimboka said:
My wife had a shortfall, until we pointed out that she was in receipt of child allowance for a long period, which they hadn’t counted (you get credits while getting child allowance)
Additionally selling a house isnt as straight forward anymore as it was 18 months ago.

anonymous-user

53 months

Friday 19th January 2018
quotequote all
200Plus Club said:
We are having fun and games at the minute with HMRC with regard to the state pension. the wife has gaps when she worked part time in her contribution records. you can apply to pay off the missing years, to boost the state pension you get at 67 etc. shes done the calcs, written a letter and sent a cheque to cover the full amount for her missing 9 years to get almost toward full entitlement. it will boost it from £108 pw to £140 or similar.
the original letter /cheque went in october, with a request for them to inform us when updated and accepted. shes since rung on 4 occasions and been told its in the system, a manager is dealing with it, and it will be sorted after new year due to how busy they are. her last call confirmed they had the letter and it was logged on the system. (December)

she got a letter last week saying they have no record of the cheque, and to advise the bank to cancel it, and to start again. annoying and worrying.
The best way to get this done right is to call them and ask for paying in slips. If they agree, they will send bank deposit slips, one per missing contribution year, which you can pay in at the post office etc.

If they refuse the slips (as they did for me) then ask for bank transfer details. They will give you a sort code and account number to wire money to as well as a reference number totally unique to you that you can use and re-use. This is fool-proof but the money cannot be allocated to contribution year this way; it just sits on your NI account as an unallocated credit. After 5 working days you call them again, say you want to allocate the credit by year and they will apply the transactions while you wait. Day or two after you should see your new state benefit entitlement when you sign onto your account.

Edited by anonymous-user on Friday 19th January 15:44

200Plus Club

10,676 posts

277 months

Friday 19th January 2018
quotequote all
Hang On said:
The best way to get this done right is to call them and ask for paying in slips. If they agree, they will send bank deposit slips, one per missing contribution year, which you can pay in at the post office etc.

If they refuse the slips (as they did for me) then ask for bank transfer details. They will give you a sort code and account number to wire money to as well as a reference number totally unique to you that you can use and re-use. This is fool-proof but the money cannot be allocated to contribution year this way; it just sits on your NI account as an unallocated credit. After 5 working days you call them again, say you want to allocate the credit by year and they will apply the transactions while you wait. Day or two after you should see your new state benefit entitlement when you sign onto your account.

Edited by Hang On on Friday 19th January 15:44
ok cheers for this, if the cheque and letter sent last week are not dealt with i will look into this thank you.
they seem very hit and miss to say the least with something as important as someones pension!

anonymous-user

53 months

Friday 19th January 2018
quotequote all
I wonder if someone can clarify something please on state pension summary?
Mine says
From 2028 my state pension forecast is £169.10 a week
£169.19 is the most I can get
40 years of full contributions

Then
You’ve been in a contracted-out pension scheme
COPE estimate £54.83 a week

Google says that state pension will be £169
Google also says £169-£54

Who is right please ?!

Shnozz

27,422 posts

270 months

Friday 19th January 2018
quotequote all
Tony427 said:
Re Pension, just be aware that its more likely than not that you were "contracted out" ( it appears most employees were) of SERPS which leads to a reduced pension entitlement.

This has significantly impacted my wife's state pension as both her last employers ( both very large organisations) contracted out the workforce and we are presently enquiring just how much extra we can pay now to bring her contributions up to the level that she needs to geta full state pension.

The poor dear will have worked for 46 years paying NI all the time but at a reduced contracted out amount. Even if she continues to work paying in NI at her current level and retires in another 5 years her NI contributions would still not entitle her to a full state pension. 51 years of continued service to the NHS and further education and she still doesn't get a full NI pension.

It's scandalous.

Luckily, I paid serps, thus was contracted in , ran a private pension into which all my pension pot has been transferred and once I reached the 35 years NI payment qualification I have never paid another penny in NI and never intend to.

Check those State pension entitlements everyone.

Cheers,

Tony
You say it’s scandalous but what did she do with the contracted out element? In my case my contracted out SERPS contribution made a nice addition to a (now) SIPP that I have invested wisely and should provide for an ok pension.

CoolHands

18,496 posts

194 months

Friday 19th January 2018
quotequote all
I have missing NI years from when I pissed about doing nothing, but I can’t buy them back? What the fk?

anonymous-user

53 months

Friday 19th January 2018
quotequote all
Jimboka said:
I wonder if someone can clarify something please on state pension summary?
Mine says
From 2028 my state pension forecast is £169.10 a week
£169.19 is the most I can get
40 years of full contributions

Then
You’ve been in a contracted-out pension scheme
COPE estimate £54.83 a week

Google says that state pension will be £169
Google also says £169-£54

Who is right please ?!
Be interested to know exactly what you googled!

The maximum state pension is currently £159.55 so not sure where £169 comes from.

The COPE estimate is basically saying ‘this is what you would have got if you had stayed contracted-in’ and assumes you probably should get at least this from the private pension you invested your contracted-out contributions in.

anonymous-user

53 months

Saturday 20th January 2018
quotequote all
Hi
The 169.10 was my figure from the governments own website! Which I logged into using my government gateway access
I googled to find out whether the cope element was to be deducted, which I gather it isn’t but conflicting info out there .I’ll get a screenshot later

Tony427

2,873 posts

232 months

Saturday 20th January 2018
quotequote all
Shnozz said:
Tony427 said:
Re Pension, just be aware that its more likely than not that you were "contracted out" ( it appears most employees were) of SERPS which leads to a reduced pension entitlement.

This has significantly impacted my wife's state pension as both her last employers ( both very large organisations) contracted out the workforce and we are presently enquiring just how much extra we can pay now to bring her contributions up to the level that she needs to geta full state pension.

The poor dear will have worked for 46 years paying NI all the time but at a reduced contracted out amount. Even if she continues to work paying in NI at her current level and retires in another 5 years her NI contributions would still not entitle her to a full state pension. 51 years of continued service to the NHS and further education and she still doesn't get a full NI pension.

It's scandalous.

Luckily, I paid serps, thus was contracted in , ran a private pension into which all my pension pot has been transferred and once I reached the 35 years NI payment qualification I have never paid another penny in NI and never intend to.

Check those State pension entitlements everyone.

Cheers,

Tony
You say it’s scandalous but what did she do with the contracted out element? In my case my contracted out SERPS contribution made a nice addition to a (now) SIPP that I have invested wisely and should provide for an ok pension.
As is common with most large organisations the employee gets no say as to what happens with the contracted out element. It is supposed to be added to their pension pot and thus offer a better return in their pension, but in fact it just disappears. In many cases they also cannot exchange their final salary scheme for a Sipps scheme. Try doing that with a teachers pension for example, you can't. I've tried.

Humble employees on the lower rungs rely on the organisations pension trustees, pension committees and professional advisers to do the right thing re their contributions.

Which is why one of my wife's recent employers has a £300m hole in their pension fund. Their only option is to cut future pension benefits. Which is one reason my wife is retiring early.

Cheers,

Tony








Ecosseven

1,972 posts

216 months

Saturday 20th January 2018
quotequote all
Interesting thread. Never throught too much about retirement too much until about a year ago but it's now something I'm spending more time planning for.

I worked for Carillion for nine and a half years (1997 - 2006) so their recent collapse has renewed my interest in pensions and how I will fund my retirement. I'll lose at least 10% of my final salary pension from Carillion so looking at ways to make this up.

I'm currently 42 and hope to retire around 60 so still 18 years left to make some decent contributions. Currently pay into a good workplace pension scheme and have a few other small investments and savings which will hopefully all contribute to the pot.

As I get older time is definitely more important than money and I can see myself getting out of the rat race in my late 50's and hopefully getting a low stress, low paid job for the last few years before full retirement. Of course all this could change next year as nobody knows what the future holds!




baliongo

Original Poster:

937 posts

179 months

Saturday 20th January 2018
quotequote all
Ecosseven said:
As I get older time is definitely more important than money and I can see myself getting out of the rat race in my late 50's and hopefully getting a low stress, low paid job for the last few years before full retirement. Of course all this could change next year as nobody knows what the future holds!
It would be great to have a crystal ball and see what is a round the corner wouldn`t it.......i have been chatting with the welder working with me on the town hall boiler house project i am currently looking after and he mentioned he has a few btl`s and owns his welding company with around 8 employees working for him on various contracts.He has a 4 bed detached home in the Birmingham area and stays in digs monday night thru to thursday night driving home on friday afternoon and seems a very stressed fellow looking after the business with his current wife`s help (she is 49 yrs old)

At 65 yrs old he will be getting his pension soon and i asked why he still carries on especially as he seems stressed and his answer was "drink and women" having had a couple of failed marriages and starting over costed him dearly over the last few years and he drinks heavily every night as he has for many many years...His back and knees are shot and his bright red face shows years of abuse and so i also asked was he happy and he said nope,have not been for years.


Robbo 27

3,605 posts

98 months

Saturday 20th January 2018
quotequote all
anonymous said:
[redacted]
As usual, I have taken the view that what happened in my own family was representative of the nation.

My father hated work and wanted to retire before he was 65 but couldnt financially, basically because he was a gambler. He died 2 weeks before aged 65.

I havent gambled in my life and have invested and saved. I will try and live my retirement through my fathers eyes.



baliongo

Original Poster:

937 posts

179 months

Saturday 20th January 2018
quotequote all
Robbo 27 said:
As usual, I have taken the view that what happened in my own family was representative of the nation.

My father hated work and wanted to retire before he was 65 but couldnt financially, basically because he was a gambler. He died 2 weeks before aged 65.

I havent gambled in my life and have invested and saved. I will try and live my retirement through my fathers eyes.
That is sad....i bet he would be proud of you

I was lucky to be there when my father passed and he said some things i wont repeat here but he wanted me to do things different to him as he worked 2 years passed retirement age,he lived on to 81 yrs old losing his wife (my mother) 15 or so years previous.



Edited by baliongo on Sunday 21st January 09:17

FocusRS3

3,411 posts

90 months

Sunday 21st January 2018
quotequote all
anonymous said:
[redacted]
What do you do for a living ?

Just remembered my wife hasn’t worked for the last 18yrs so no NI contributions means her state pension will Be practically non existent .

dingg

3,974 posts

218 months

Sunday 21st January 2018
quotequote all
FocusRS3 said:
Just remembered my wife hasn’t worked for the last 18yrs so no NI contributions means her state pension will Be practically non existent .
Best check that as my wife hasn't worked much but qualifies for full pension due to credit of nic for when the kids were being brought up.


anyway in similar vein for this thread

my plan is to retire either this year or next - take my 25% from my pension pot and sell up in the uk move to somewhere where its possible to drawdown almost my whole pot over 10 years tax free, after gaining residence there , that should release circa 50k a year , with about 100-150k left in the pot when I return to uk , I shall re-invest 20k a year in the wife's isa (which is currently quite healthy) , out of the 50k I drawdown (she will keep uk residency to enable this to happen)

after the 10 years are up myself and wife both will be able to obtain our OAP in the uk ,having paid (or been exempted from) enough contributions already, I will be still able to drawdown a small pension from my remaining pension pot (hopefully) which should give us a decent amount free of tax , and a quite healthy sum tax free from the wife's isa pot , we also would need to use some of this pot to purchase another property back in the uk.

its a no brainer as far as I can see , as long as I can legitimately avoid the tax and get a more relaxed lifestyle earlier and a holiday home at the end of it thrown in for free as I see it - man maths wins here!

just need steadyish returns from the stock market and have a good buffer (which we have) if it all goes wrong for a year or two , so I'm happy with the risk/reward

so were off in september house hunting smile



Edited by dingg on Sunday 21st January 10:48


ETA - the big risk here is the wife falling out with me and running off with the pot/poolman

Edited by dingg on Sunday 21st January 11:21

anonymous-user

53 months

Sunday 21st January 2018
quotequote all
FocusRS3 said:
What do you do for a living ?

Just remembered my wife hasn’t worked for the last 18yrs so no NI contributions means her state pension will Be practically non existent .
You really need to get a statement for her and be sure. If she does have missing years you can buy some of them and the rate of return is very high. (Buy a year for circa £700 and get more than £200 per year for life). The reduced rates to buy her earlier years will expire next year so don't wait to decide what to do.