Can we retire please? How much money do you really need need?

[Portland]

We do, we need no more than £12,000k a year for everything including holidays in the MH (whatever they are!) and large vet bills. We've been doing this for years and one reason why we retired many years ago (me in my late 40s and hubby early 50s). We find it 'hard' to spend on stuff like meals out, etc as it's not something we've done much over the years anyway and have never desired the 'latest' gadget etc, our last massive spend was the Carthago but that'll be with us for a long time and does exactly what we want (well from what I can remember from last winter!). We may need to spend on stuff like repairs etc and are nearly mortgage free having paid over half of it (£55k) off over the last few months from Bonds, spare income etc. We'll have it paid off totally by the end of the year however it may be as early as May if we can manage it with other Bonds and spare income as we're using 0% long period credit cards by putting everything we can on them (up to their credit limit of course!) as it means the money can then go towards reducing the mortgage (and thus interest payments) and we'll pay the CCs off just before the 0% credit term ends.

It is difficult start spending on stuff because it would be 'nice' to do so, rather than 'need' to, but it's a very difficult habit to break, once the mortgage is gone our annual outlay will be even less.

I admire you for the ability to do this, well done.

 

[Bluemanc100]

Changes in 2016 mean individuals will now vary in number of qualifying years.....used to be that 30 qualifying years was enough to get a full pension. After 2016 it is likely more years needed. Mrs Stoosal presently has 35 but needs another 4 years to qualify for full pension.

I've got 41 but as mentioned earlier I will check this out

 

[Cheshirecat57]

Changes in 2016 mean individuals will now vary in number of qualifying years.....used to be that 30 qualifying years was enough to get a full pension. After 2016 it is likely more years needed. Mrs Stoosal presently has 35 but needs another 4 years to qualify for full pension.

The new State Pension

How to get and claim your State Pension, State Pension age - for men born on or after 6 April 1951 and women born on or after 6 April 1953.

www.gov.uk

Theres the link, its 35 full years

 

[Fragle]

Question please... I was made redundant in March 2020 at 56 and I took this as a chance to retire as I am already in receipt of an MOD pension.

My Gov.UK / HMRC info tells me I have paid NI for 41 years. Will my not paying NI until my state pension age at 67 affect the state pension I get or will I need to make a voluntary contribution of some kind?

It is easy to check online and see all your payment through the government gateway.
I also gave them a call to check as for a few years I was contracted out through the company but the kind gentleman told me as of last April I'd covered that period and no longer need to work to increase my pension I will get a full state pension even if I do no more.
He went as far as to say if I continue to work I'm only lining the pockets of those that don't contribute or never have contributed.
That helped with the decision to retire

 

[Cheshirecat57]

Don't bother phoning......they’re shut

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[gus-lopez]

Will my not paying NI until my state pension age at 67 affect the state pension I get or will I need to make a voluntary contribution of some kind?

depends if you were 'contracted out' ifso all those years come off of any state pension payable under the post 2016 state pension

and I question why they couldn’t use some of my extra years over the max 35 years that I paid NI Contributions, towards the years that I was contracted out.

Because they state you have the benefit of the contracted out payments in to a firms pension.The new state pension wasn't to give youa full state pension + your firms one

No brainier though. £780 gets you £5 per week onto your pension - up to the £174 per week max. Only have to live for 3 years for it to pay for itself. Every year after that is for free (provided I don’t kick the bucket)!

only if you have the time to make up contracted out payments. I was 6 or 7 years contracted out , Retiring in 2019 under the post 2016 pension scheme means I was only allowed to pay for the 2016-2017- 2017-2018 & 2018 -2019 years Any before 2016 did not count.

Do you run a car on that amount as well?

It is 40% more than I manage to live on.

I may be wrong, but I am sure you get a full pension at your state retirement age with 35 years of full contributions
Check online using your government gateway and NI number

No it doesn't matter what it says the only 100% guaranteed pension confirmation is when you contact the "Future pensions forecast team"

Mine said I had far in excess of the required years on the 'state pension forecast' I did , unfortunately any contracted out years do nit count post 2016.Even the HMRC national insurance help desk will only tell you what full years you have paid in for They have no idea whatsoever whether ALL THE YEARS COUNT. They now are required to tell you when/if you ring " Have you spoken to the Future pensions forecast team" as an opening statement due to many people paying in for years before 2016 that do not count towards pension rights.

 

[Otter Spotter]

I think that for the full new state pension you need 35 years contributions and that won’t increase if you work longer. Unless you were ‘contracted out’ of the serps scheme. Having worked for the MOD you probably were, so extra years should count up to the max of around £175 per week pension.

full details here: https://www.gov.uk/new-state-pension

Just a quick point, be aware, if you have been contracted out if the state scheme at some point, probably from 1988 to around 2000 then you may find your state pension is reduced.
thus is because DWP assume the shortfall will be covered by the pension scheme the contracted out payments were made to.

 

[Minxy]

Been reading this post with interest as so many of the questions we've asked our self have been discussed.

I am 53 and the OH is 51, our plan is to retire at 55 although OH has said if I retire at 55 she will just go as it's not fair I work less years. I have pointed out I started my working life before her to no avail so looks like I will retire at 56 when she turns 55. We have a figure in mind that we need to enjoy our life and its good to hear others stories of how they manage some on a lot less than our budget and some on a lot more, we've been loosely planning this for a few years without it effecting how we currently live.

You might want to try to persuade her to let you retire before her as it will 'beneficial' for you both. My hubby retired 2 years before me at 52 as he could get a redundancy payoff from work (he showed them that his job could be developed by him to make himself obsolete). I stuck it out for a further 2 years until I was able to get it due to an organisation wide redundancy scheme and bit their hands off!

When he left he immediately took over most of the 'house' chores such as cooking, cleaning, shopping etc (not ironing though!) ... it saved me having to get home every night from work and do tea which I'd done for 29 years and it was great to be able to come home and chill after a hard day! It also meant he got into a routine and we benefitted by not having to spend our time at weekends doing chores and could do other things instead.

View attachment 455860

Strewth ... you don't half spend some dosh!

 

[Otter Spotter]

Check your State Pension forecast

Find out how much State Pension you could get (your forecast), when you could get it and how you could increase it

www.gov.uk

Be aware, the calculator is not always correct, you should Print off a BR19 form from gov.uk and fill in and send off for an exact forecast for you.

 

[Fragle]

We do, we need no more than £12,000k a year for everything including holidays in the MH (whatever they are!) and large vet bills. We've been doing this for years and one reason why we retired many years ago (me in my late 40s and hubby early 50s). We find it 'hard' to spend on stuff like meals out, etc as it's not something we've done much over the years anyway and have never desired the 'latest' gadget etc, our last massive spend was the Carthago but that'll be with us for a long time and does exactly what we want (well from what I can remember from last winter!). We may need to spend on stuff like repairs etc and are nearly mortgage free having paid over half of it (£55k) off over the last few months from Bonds, spare income etc. We'll have it paid off totally by the end of the year however it may be as early as May if we can manage it with other Bonds and spare income as we're using 0% long period credit cards by putting everything we can on them (up to their credit limit of course!) as it means the money can then go towards reducing the mortgage (and thus interest payments) and we'll pay the CCs off just before the 0% credit term ends.

It is difficult start spending on stuff because it would be 'nice' to do so, rather than 'need' to, but it's a very difficult habit to break, once the mortgage is gone our annual outlay will be even less.

I asked the original question because of the number of people we had met on the road fulltiming or retired that said we only need £xx to live off.

Doing the sums ourselves as I've said previously £12500 is our personal minimum as well keeping our current property. So not that different to yourself and I quite agree we live happily on a small amount. Suppose its how we were brought up. no waste.
£15k would give us spare but I don't knock anyone if you have £30k or think you need that amount. Good luck and enjoy but like Minxy Girl if your not used to spending that much habits of a lifetime kick in

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[Fragle]

Just a quick point, be aware, if you have been contracted out if the state scheme at some point, probably from 1988 to around 2000 then you may find your state pension is reduced.
thus is because DWP assume the shortfall will be covered by the pension scheme the contracted out payments were made to.

Im assuming that I must have covered the years I was contracted out as well to be able to get a full state pension.

Mine says
£175.20 is the most you can get
you cannot improve your forecast any more
If your working you will still pay national insurance as they fund other state benefits

 

[TheMachMan]

I asked the original question because of the number of people we had met on the road fulltiming or retired that said we only need £xx to live off.

Doing the sums ourselves as I've said previously £12500 is our personal minimum as well keeping our current property. So not that different to yourself and I quite agree we live happily on a small amount. Suppose its how we were brought up. no waste.
£15k would give us spare but I don't knock anyone if you have £30k or think you need that amount. Good luck and enjoy but like Minxy Girl if your not used to spending that much habits of a lifetime kick in

That’s impressive still. Looking at bills and essentials and no mortgage can’t get close to that.

 

[Minxy]

I've been thinking about making extra payments to my state pension 'fund' as I'm on 1 years short having 34 full years of contributions, my current forecast is for £139.32 a week as opposed to the current max of £175.20.

I assume I would need to make up the amount based on 'Class 3' payments of £15.30 a week for a year = £795.60 which would give me a full 35 years and thus take me up to £175.20 a week an increase of £35.88, meaning 'payback' would be just under 2 years (22 months). Have I got it right?

Of course I'd need to allow for tax as I would be over my PA due to me taking my work pension and if I'd still have income from property (lodges etc) so I'll have to work out what the tax implication is as any extra pension may be undermined by this.

 

[Ivory55]

I only get a tenner pocket money now so I see no problem surviving on a pension. Haha

 

[Cheshirecat57]

I've been thinking about making extra payments to my state pension 'fund' as I'm on 1 years short having 34 full years of contributions, my current forecast is for £139.32 a week as opposed to the current max of £175.20.

I assume I would need to make up the amount based on 'Class 3' payments of £15.30 a week for a year = £795.60 which would give me a full 35 years and thus take me up to £175.20 a week an increase of £35.88, meaning 'payback' would be just under 2 years (22 months). Have I got it right?

Of course I'd need to allow for tax as I would be over my PA due to me taking my work pension and if I'd still have income from property (lodges etc) so I'll have to work out what the tax implication is as any extra pension may be undermined by this.

View attachment 456350

It says you have to pay 8 more years for the £175 doesnt it

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[ElddisNotElvis]

depends if you were 'contracted out' ifso all those years come off of any state pension payable under the post 2016 state pension

Because they state you have the benefit of the contracted out payments in to a firms pension.The new state pension wasn't to give youa full state pension + your firms one

only if you have the time to make up contracted out payments. I was 6 or 7 years contracted out , Retiring in 2019 under the post 2016 pension scheme means I was only allowed to pay for the 2016-2017- 2017-2018 & 2018 -2019 years Any before 2016 did not count.

It is 40% more than I manage to live on.

No it doesn't matter what it says the only 100% guaranteed pension confirmation is when you contact the "Future pensions forecast team"

Mine said I had far in excess of the required years on the 'state pension forecast' I did , unfortunately any contracted out years do nit count post 2016.Even the HMRC national insurance help desk will only tell you what full years you have paid in for They have no idea whatsoever whether ALL THE YEARS COUNT. They now are required to tell you when/if you ring " Have you spoken to the Future pensions forecast team" as an opening statement due to many people paying in for years before 2016 that do not count towards pension rights.

Yes - don’t just pay it before having the conversation and telling them you have Spoken to Future Pensions Team. Otherwise, the payment is non reversible. Hence, some paid and it didn’t improve their state pension forecast.

 

[ElddisNotElvis]

I've been thinking about making extra payments to my state pension 'fund' as I'm on 1 years short having 34 full years of contributions, my current forecast is for £139.32 a week as opposed to the current max of £175.20.

I assume I would need to make up the amount based on 'Class 3' payments of £15.30 a week for a year = £795.60 which would give me a full 35 years and thus take me up to £175.20 a week an increase of £35.88, meaning 'payback' would be just under 2 years (22 months). Have I got it right?

Of course I'd need to allow for tax as I would be over my PA due to me taking my work pension and if I'd still have income from property (lodges etc) so I'll have to work out what the tax implication is as any extra pension may be undermined by this.

View attachment 456350

Are you sure you are only one year short?

One years vol contributions (£780) only adds £5 per week to pension, so your £139 would only go up £139 + £5 = £144 per week.

You must have another 6 more years (currently £780 x 6) to pay which is another 6 x £5 = £30 + £144 = £174 max.

 

[Ivory55]

Martin Lewis does a table on his site on how long you have to live before breaking even on the extra pension contribution you make.

 

[lorger]

You might want to try to persuade her to let you retire before her as it will 'beneficial' for you both. My hubby retired 2 years before me at 52 as he could get a redundancy payoff from work (he showed them that his job could be developed by him to make himself obsolete). I stuck it out for a further 2 years until I was able to get it due to an organisation wide redundancy scheme and bit their hands off!

When he left he immediately took over most of the 'house' chores such as cooking, cleaning, shopping etc (not ironing though!) ... it saved me having to get home every night from work and do tea which I'd done for 29 years and it was great to be able to come home and chill after a hard day! It also meant he got into a routine and we benefitted by not having to spend our time at weekends doing chores and could do other things instead.


Strewth ... you don't half spend some dosh!

I do all those chores already

If a redundancy package came available I’d be first in the queue

 

[ElddisNotElvis]

Im assuming that I must have covered the years I was contracted out as well to be able to get a full state pension.

Mine says
£175.20 is the most you can get
you cannot improve your forecast any more
If your working you will still pay national insurance as they fund other state benefits

I took early retirement/redundancy at 55 but got another job for 5 years before I retired early at 60. These 5 years negated some of the contracted out years and bumped my pension forecast up a bit. I just had something like 4 years to make up in the end, and now have just the 2020/21 to pay for to get £174 max. I can’t do this until after the end of this financial year end.

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[Ralph-n-Bev]

It says you have to pay 8 more years for the £175 doesnt it

Yes that’s what I thought.
Minxy Girl I think it’s 8 years. If you contact them they’ll tell you which years your missing which are the cheapest to pay. I was short 4 because they’d moved the goalposts again and I’d opted out serps. As said speak to future pension team first to make sure every case is different . That’s the only way to be certain.

 

[ElddisNotElvis]

Don't bother phoning......they’re shut

I got through on the phone to Future Pensions Forecast Team last week and also the National Insurance Team to pay off one of my missing years?

 

[fat haggis]

I’m mid 50s and have a full (90%)war disability pension for a wile now, I found out a few years ago that I don’t get a state pension when I’m at the age. I just keep getting war pension till I . As I understand it.

 

[DandG5515]

I've been thinking about making extra payments to my state pension 'fund' as I'm on 1 years short having 34 full years of contributions, my current forecast is for £139.32 a week as opposed to the current max of £175.20.

I assume I would need to make up the amount based on 'Class 3' payments of £15.30 a week for a year = £795.60 which would give me a full 35 years and thus take me up to £175.20 a week an increase of £35.88, meaning 'payback' would be just under 2 years (22 months). Have I got it right?

Of course I'd need to allow for tax as I would be over my PA due to me taking my work pension and if I'd still have income from property (lodges etc) so I'll have to work out what the tax implication is as any extra pension may be undermined by this.

View attachment 456350

£139 does sound like the old forecast based on full 30 year contribution. My wife does a little self employed cleaning and helping for pensioners, just pay class 2 @ £3.05 / week to get her contribution. Just a thought.

 

[gus-lopez]

Mine says
£175.20 is the most you can get
you cannot improve your forecast any more
If your working you will still pay national insurance as they fund other state benefits

Don't believe it. check with future pensions forecast

my current forecast is for £139.32 a week as opposed to the current max of £175.20.

That isn't correct as 1 year is worth approximately £5 so therefore you are 8 years short & I'd assume you have at some time been contracted out. the 34 years is what you have already paid but not what your pension will be based on.
**I see others have pointed out the " you need to " . The only guaranteed way is contact with future pensions forecast.

£139 does sound like the old forecast based on full 30 year contribution. My wife does a little self employed cleaning and helping for pensioners, just pay class 2 @ £3.05 / week to get her contribution. Just a thought.

You do not now get a "forecast" based on the old pre-2016 pension amount or only requiring 30 years.

* & you can't pay the class 2 without working.

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[Fragle]

Why would I not believe it.
I can log in online and check and have called to confirm.

What have I missed ?

 

[DandG5515]

Gus-Lopez, I miss understand minxy contribution, my wife works as self employ cleaner with an 8k pa profit to pay her class 2 contribution.

 

[Minxy]

It says you have to pay 8 more years for the £175 doesnt it

Don't believe it. check with future pensions forecast

That isn't correct as 1 year is worth approximately £5 so therefore you are 8 years short

I think it’s 8 years. If you contact them they’ll tell you which years your missing which are the cheapest to pay. I was short 4 because they’d moved the goalposts again and I’d opted out serps.

It's confusing because it says I have 34 full years up to 2011/12 and 8 'not full' years from 2012/13 to 2019/20 (see below), I wasn't working from January 2012 so that's why those last years are not 'full', although 2011/12 will have some 'credit' as I made 9 months worth of contributions.

& I'd assume you have at some time been contracted out. the 34 years is what you have already paid but not what your pension will be based on.

I was in our work pension from the age of 21 and know that this reduced the NI contribution for pension purposes to some extent but its about as clear as mud really! You can't now request an 'accurate' forecast online anymore (you could previously as I know I've had them in the past) so it looks like the only way to get this is to ring ... oh what joy that will be!

**I see others have pointed out the " you need to " . The only guaranteed way is contact with future pensions forecast.

As said speak to future pension team first to make sure every case is different . That’s the only way to be certain.

Will do ... when I can summon up the patience to hang on the phone for goodness knows how long.

 

[Ralph-n-Bev]

Future pensions will tell you which are your “cheapest” years to pay and how many you need to pay .
Though if you look at the view details above, you’ll see yourself which are the cheapest years.
I bit the bullet and payed my owing years a couple of years ago, even though they explained that if I was working PT I may get a cheaper year before I fully stop working.
I just wanted it out of the way and paid up. Working PT not earning enough to pay tax and NI I wouldn’t get full year stamp.
I’m 57 now and no doubt the retirement age will move again before I get the government state pension .
They’ve got to claw back all the cash they’ve had to fork out down to Covid somehow .......

 

[The Wino]

Future pensions will tell you which are your “cheapest” years to pay and how many you need to pay .
Though if you look at the view details above, you’ll see yourself which are the cheapest years.
I bit the bullet and payed my owing years a couple of years ago, even though they explained that if I was working PT I may get a cheaper year before I fully stop working.
I just wanted it out of the way and paid up. Working PT not earning enough to pay tax and NI I wouldn’t get full year stamp.
I’m 57 now and no doubt the retirement age will move again before I get the government state pension .
They’ve got to claw back all the cash they’ve had to fork out down to Covid somehow .......

Don't get the last bit!. It seems fairly reasonable to me to have a pension linked to how many years full ni has been paid if anything I think the extra years people can buy are way too cheap when compared to annuities especially given index linking etc. Its a pity the system isn't easier to get into though to look at how the contributions stack up.

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