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

[Chris]

Does being self employed reduce your eventual pension? My NI contributions are very small.

 

[Deneb]

Which surely means you will get the old state pension amount?

Yes, more than the old amount. No-one should have lost out under the transitional calculations, but conversely anyone who has made NI contributions through employment prior to 2016 shouldn't assume that they will automatically get the full NSP, no matter how many years they have contributed. Many will, and some will get more because the transitional calculation meant that their starting amount exceeded the amount of the NSP. The entitlement to the full NSP after 35 years of contributions only applies to contributions from 2016 on though.

 

[Fragle]

Does being self employed reduce your eventual pension? My NI contributions are very small.

The better half is a self employed childminder for over 20yrs and she will get a full state pension.

 

[Silver-Fox]

Does being self employed reduce your eventual pension? My NI contributions are very small.

It shouldn’t

You used to pay a reduced amount every month then a percentage of your profits as well.

 

[Deneb]

Does being self employed reduce your eventual pension? My NI contributions are very small.

You probably paid Class 2 contributions if you were self employed. They are substantially cheaper than Class 3 contributions paid by employees, but a full year of Class 2 is equivalent to a full year of Class 3.

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[Deneb]

The better half is a self employed childminder for over 20yrs and she will get a full state pension.

Women also get credits for years in which they received maternity allowance, if they weren't working.

 

[Wikky]

This is a really interesting thread with lots of useful info.
I did an enquiry early last year through the Govt Gateway and it showed I would get the full state pension. The surprise was that I had to wait another 6 months before I could claim it which was a change from the previous year. In fact my eligability date had changed to 1 week before my 66th bd.
I hadn't thought of myself as a retiree and wanted to continue working as I enjoyed my job. However I then thought why not so I claimed the state pension last year and every time it comes in to my bank account I smile as I'm being paid to do what I want even though I've worked for it over 40+ years. I immediately sorted out my bus pass as, lets face it, that is a useful card for motorhomers.
About a month after retiring we both caught covid which caused me a stay in hospital but am recovered now. Looking back on this episode I feel that I've made the right decision even though I was doubtful about retiring at the time.
As several people have said, if you can afford it, do it and enjoy doing what you want to do...we don't know what is around the corner to mess us up.

 

[bigtwin]

May be should be taught in school rather then some of the other subjects that have no use when they have left school.

What, things like mathematics that covers such things as compound interest?

I saw the value of that immediately it was taught at school.

There are lots of useful things taught at school but, it seems, some choose not to learn the lessons.

You might be right though as, affordability aside, it is surprising how many folks don’t pay much into pensions given the immediate 20% (or 40%) uplift.

Ian

 

[Chris]

It shouldn’t

You used to pay a reduced amount every month then a percentage of your profits as well.

I see . It’s only the monthly ones I have noticed - only about £20 I think.

 

[Silver-Fox]

I see . It’s only the monthly ones I have noticed - only about £20 I think.

When you do a year end tax return and HMRC will show you your tax liability and how much NI is to be paid due to profit.

Similar to when you work on the books.
The more you earn the more you pay.

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[Chris]

When you do a year end tax return and HMRC will show you your tax liability and how much NI is to be paid due to profit.

Similar to when you work on the books.
The more you earn the more you pay.

I leave all that to the accountant. Which reminds me he is chasing me to approve my tax return

 

[Oscar]

In case it's of any interest to anyone - MoneySavingExpert's Academy of Money

AOM_1 - OpenLearn - Open University - AOM_1

 

[Langtoftlad]

Well that was an interesting & expensive experience - mostly in the art of patience.
But, hopefully, ultimately rewarding.
Called the Future Pensions Forecast Team as advised on this thread.

Confirmed the lower figure on forecast is what I'd get now with my NI record.
Confirmed that if I paid the past 4 years + this years NI [which has not yet been published, but he told me what it was!], my weekly pension would increase to very nearly the maximum, all bar £2.08

He said that I might wish to consider if paying the 2021/22 contribution [estimated at £850] would be worth it for an increase of £108.16 a year

His calculation for back payments matched mine.
All good.

But to make the payment, I had to call HMRC [ 0300 200 3500 ] and use the phrase "Spoken To Future Pensions" to their answerphone bot, otherwise I'd end up back where I started.

After a short wait, I spoke to a very nice lady, who agreed the figures, and the current year's. Both our totals matched so she generated some sort of payslip on my tax record which created a 18 digit reference number to ensure my payment was connected to my NI record.

Online banking - paid £3683.80
If all goes to plan, my state pension should increase by £1301 pa and I should start "winning" in less than three years

 

[Stoosal]

Long wait to get through to the future pensions team but I have to say was very impressed by the service they gave. Knew their stuff and explained all options clearly etc. Very worthwhile call. Just shows that just because you think you have enough payments at 35 years etc the recent changes mean that it may not be in everybody’s/all circumstances.

 

[Tombola]

stumbled on this when watching the bowls on tv

https://info.hubfinancialsolutions.co.uk/destinationretirement1

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[Otter Spotter]

As a matter of interest, does anyone know why my forecast on the gov.uk site is as high as £195.48 per week? I was contracted out for a few years.

It may show £195 but the will be a reduction for COPE. It is usually shown 3 or 4 paras lower on the forecast. when You get to state retirement age you will receive the higher amount either £195 less COPE or £175 which ever is the higher.

 

[Otter Spotter]

stumbled on this when watching the bowls on tv

https://info.hubfinancialsolutions.co.uk/destinationretirement1

Be careful Hub is an agent for Just retirement an Insurance company and they will be looking to get you to switch your pensions to one with ‘Just‘. So not Independent and may not be the most suitable for you.

 

[Hirsch]

Were you contracted out for your entire career? I'm assuming an MOD pension would have been contracted out?

Only asking as I have 46 full years of NI contributions, and even if I purchase another 4 years which is the most I can buy before SPA, my maximum SP will be about £10 a week short of the full NSP at current rates.

Same for me. 46 years. Most I can get is £168.

 

[The Lord Squid]

It may show £195 but the will be a reduction for COPE. It is usually shown 3 or 4 paras lower on the forecast. when You get to state retirement age you will receive the higher amount either £195 less COPE or £175 which ever is the higher.

Many thanks for the response but there is no mention of COPE. I have a financial adviser so I'll mention it at my next review. Here's a screenshot

 

[Silver-Fox]

I leave all that to the accountant. Which reminds me he is chasing me to approve my tax return

So do I but there will be a figure of what NI is due/paid for that year.

Hurry up and sign 31st Jan or it’s a penalty payment

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[Silver-Fox]

Can someone tell me when the state pension is £175 the poster above us showing £195

 

[Ditcha]

Only way he can get more than the £175.20 is by putting of claiming or his pension forecast is before 2016 so old style pension

 

[The Lord Squid]

Can someone tell me when the state pension is £175 the poster above us showing £195

Only way he can get more than the £175.20 is by putting of claiming or his pension forecast is before 2016 so old style pension

This may explain it.

Why does my friend get a bigger state pension though I earned more?

I believe he has had similar working years as myself but I believe I will have paid more National Insurance as I will have earned more.

www.thisismoney.co.uk

 

[Boris7]

I find the whole thing a minefield, I’m entitled to a full state pension at some point, and a private pension which I can take now or wait for, but better still I can sell a property every 18-24 months that will see me through.

What worries me is people who have not been as lucky as me, there’s been a general increase in the division of wealth over the last 30 years, and those who have been earning less will have little or no money behind them when they come to retirement and still face increasing costs of living.

Ive got a new tenants moving in next week, he earns £55k and she earns £25k but properties in this area are out of their reach, it’s all a bit grim for younger people.

 

[Ditcha]

This may explain it.

Why does my friend get a bigger state pension though I earned more?

I believe he has had similar working years as myself but I believe I will have paid more National Insurance as I will have earned more.

www.thisismoney.co.uk

Yes like I quoted your pension is based on the old rules rather than the new rules.

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[Silver-Fox]

This may explain it.

Why does my friend get a bigger state pension though I earned more?

I believe he has had similar working years as myself but I believe I will have paid more National Insurance as I will have earned more.

www.thisismoney.co.uk

Thank you

 

[Vipar]

Guys you need to check out personal marriage allowance to get your tax code sorted mine is 50M
Basically you get any unused wife’s tax allowance added to yours. Back dated for a couple of years. And you get a refund we got £945.00

 

[Hirsch]

I find the whole thing a minefield, I’m entitled to a full state pension at some point, and a private pension which I can take now or wait for, but better still I can sell a property every 18-24 months that will see me through.

What worries me is people who have not been as lucky as me, there’s been a general increase in the division of wealth over the last 30 years, and those who have been earning less will have little or no money behind them when they come to retirement and still face increasing costs of living.

Ive got a new tenants moving in next week, he earns £55k and she earns £25k but properties in this area are out of their reach, it’s all a bit grim for younger people.

It's very grim for the majority of the younger generation

 

[Ivory55]

It's very grim for the majority of the younger generation

The older ones are not living a high life either.

 

[Hirsch]

The older ones are not living a high life either.

I'm sure a lot aren't.

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