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Retirement

YorkMackem said:
It's little wonder that those who've retired and have private pensions aren't tempted to get back into work. Even a modest income on top of good pensions will see you paying 40%. And yet we're called "financially inactive"" despite paying sheds of tax.
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The term "financially inactive" ignores me. It is being used more commonly and I think it is being pushed because we have various worker shortages and even the term feels like it is to cause a guilt trip.

Like you say, those retired have an income, pay pension and buy goods and services. One of my cash worries about retirement is if I will be tempted to spend a lot more, buying things that I'm filling my free time with.

When I retire, I will be contributing to the inland revenue and business in the UK. There will be plenty of action financially.
 

YorkMackem said:
The plot thickens. Just realised that my Teacher's Pension, which is for a modest amount and not something I receive a payslip for, has had the emergency tax code k993 applied to it and has now been adjusted to 652L. This is most likely because I left HMPPS in October so am no longer earning as much, in fact considerably less.

This action has resulted in a tax refund that I wasn't anticipating and more or less cancels out the arrears due at the end of the month.

This of course is great news, but by fuck, does it really need to be so stressful? My earnings are all visible in real-time to HMRC and yet it takes them up to 18 months to spot fluctuating wages and to make adjustments. So much for IT and AI in particular set to help with things like this.

For those that don't know, tax arrears are no longer recovered via tax code adjustments, you have to either cough it up in a oner, or call them once it's due and to setup a payment plan.
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I updated my estimated earnings on the HMRC tax portal (it was a significant reduction).

What this meant is I had paid more tax already than due on my full year earnings.

HMRC in their wisdom then declared I had underpaid tax, because the code adjustment (to correct a prior year error) meant I received a slightly higher credit than I was due for those pay periods.

Essentially I had overpaid hundreds or thousands but they wanted me to pay them a fraction of that first then reclaim the 'estimated' overpayment after the end of the year.

Couldn't make it up. Took 4 phone calls to sort it.
 
TheWanderer said:
I think some of the figures mentioned here would see you house bound most of the time and not being able to afford the things retirement is for, to really enjoy yourself.

Mad if you think about it, graft your arse off for years, f***ing your body (for those with physical jobs) and then just scrape by on enough money to heat your homes and pay your bills when in your 60’s!

If mortgage isn’t a consideration at an age to retire, then I’d recon an income after any tax of around £36k, around £3000 a month should be a nice target. £1000 for bills and around £500 a week disposable income, but more importantly your body needs to be in a state to actually enjoy it.
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You need to be making the most of your non working time while at work of course and doing stuff a bit slower in your 60s sounds okay rather than spending a fortune ticking lists off .
Walks and getting out an about is free and not housebound. You can blow 500 in a week bit every week ??
Fletch said:
Speaking of tax codes
Out of curiosity are you better off retiring at the end of a tax year ?
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Yes ,if you want to load pensions up with your yearly allowance its handy
I have a pension I can start drawing in lumps as I see fit so if I have cash to chuck in just before packing in you're getting the tax break on it . So it's a last minute boost . If I'm crafty drawing it out under my allowance I'll benefit that tax
 
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DaveH said:
The term "financially inactive" ignores me. It is being used more commonly and I think it is being pushed because we have various worker shortages and even the term feels like it is to cause a guilt trip.

Like you say, those retired have an income, pay pension and buy goods and services. One of my cash worries about retirement is if I will be tempted to spend a lot more, buying things that I'm filling my free time with.

When I retire, I will be contributing to the inland revenue and business in the UK. There will be plenty of action financially.
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'Economically inactive' is a better description of those who have chosen to retire.
 
Forty said:
What is The Current State Pension.?
When do you start to pay tax if you add your Private Pension to the state?
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Pretty much straight away if you get full state pension. Full state pension is about the same as the tax free allowance, might even be a touch above now
 
Forty said:
What is The Current State Pension.?
When do you start to pay tax if you add your Private Pension to the state?
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Current state pension is relevant to NI contributions you can check it here.

You must be logged on to see external links
 
Old Prestonian said:
'Economically inactive' is a better description of those who have chosen to retire.
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Is that not the same? If you are spending an paying tax then you are not inactive as far as the economy is concerned.

A lot of tourist places love the activity of the retired in their local economies, out of school holiday time.
Forty said:
What is The Current State Pension.?
When do you start to pay tax if you add your Private Pension to the state?
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If you have the full pension and have been paying NI, it is £11,973.

The main thing I need to work out related to that is how to fund my life from stopping working to state pension time. I reckon after I'm 67 the state pension plus my private pension will be a pretty comfortable amount to live on. But the time from early retirement to state pension age, is the time I'm most likely to be physically active, out doing stuff and as a result, spending cash.

If I retire too early, I face being skint until I'm 67. If I work too late, I face having savings and a larger pension that I'm not likely to need. I'm hoping the sweet spot is 58.
 
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DaveH said:
Is that not the same? If you are spending an paying tax then you are not inactive as far as the economy is concerned.

A lot of tourist places love the activity of the retired in their local economies, out of school holiday time.
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No. You are not contributing towards GDP if you are not working.
 
Matt Hopkins said:
FSP is £11502 this tax year rising to £11973 next tax year. Personal allowance is £12570 so next year you can add £597 to your FSP before you pay tax
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Scarry that for anyone who hasnt got a massive private pension pot.
This freezing of Personal Allowance by Sunak and Hunt has screwed people on low income & pensioners.
One of the elephant traps they left Labour.
 
DaveH said:
Is that not the same? If you are spending an paying tax then you are not inactive as far as the economy is concerned.

A lot of tourist places love the activity of the retired in their local economies, out of school holiday time.

If you have the full pension and have been paying NI, it is £11,973.

The main thing I need to work out related to that is how to fund my life from stopping working to state pension time. I reckon after I'm 67 the state pension plus my private pension will be a pretty comfortable amount to live on. But the time from early retirement to state pension age, is the time I'm most likely to be physically active, out doing stuff and as a result, spending cash.

If I retire too early, I face being skint until I'm 67. If I work too late, I face having savings and a larger pension that I'm not likely to need. I'm hoping the sweet spot is 58.
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I'm not wanting to be negative about your retirement plans but from what I remember of your age I very much doubt the state pension will be at 67 by the time you reach that age, more like 70 at least from what the forecasters say. having said that it's impossible to know what could happen.
 
Forty said:
What is The Current State Pension.?
When do you start to pay tax if you add your Private Pension to the state?
Click to expand...
The key is to try and get some sort or pension to pack in a bit earlier than state one . Drawdown pension where you try to get up to your tax free allowance then use maybe some of your own cash or isas to top it up .
Once state one kicks in you will start paying tax unless you've moved your other pots across to isa etc
 
Will e said:
I'm not wanting to be negative about your retirement plans but from what I remember of your age I very much doubt the state pension will be at 67 by the time you reach that age, more like 70 at least from what the forecasters say. having said that it's impossible to know what could happen.
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Aye all my forecasting is disregarding the state pension. When/if I reach 67 it will then be a nice income boost.

Plans based purely on work pension
 
Will e said:
I'm not wanting to be negative about your retirement plans but from what I remember of your age I very much doubt the state pension will be at 67 by the time you reach that age, more like 70 at least from what the forecasters say. having said that it's impossible to know what could happen.
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Could potentially be means tested too so if you have an occupational pension of £20k then you don't get the full amount.
 
Forty said:
Scarry that for anyone who hasnt got a massive private pension pot.
This freezing of Personal Allowance by Sunak and Hunt has screwed people on low income & pensioners.
One of the elephant traps they left Labour.
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Think it was the trade off from reducing NI. The idea being it discourages people from retiring early to help plug skills shortages post covid after loade of over 55s just said sod it, I've had enough
Darlo1973 said:
Could potentially be means tested too so if you have an occupational pension of £20k then you don't get the full amount.
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Think any future state pension means testing will be over the 40% income tax threshold. Not a chance it'll be as low as £20k
 
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