Pensioners Benefits

[Denisdiamond]

I will be 65 in 5 weeks time. I intend to stay working for a considerable time after that, hopefully. I live alone as my partner died some weeks ago, and I live in flat with a mortgage. I work a 28 hour week as a cleaner although most weeks I do some overtime, normally about 10 hours. My question is, what benefits, if any, will I be entitled to ? Thank you.

[Jackdaw33]

You will get the state pension, for which you will have to apply. Do it now so it's ready for you when you hit 65.

[sandyRoe]

You'll also get the winter fuel allowance. It's £250, I think, for someone on their own. And, depending where you live, a free bus pass.

[vakayu]

First of all condolences for your recent loss,I would also check if there are limitations or restrictions on amount of hours you can work!

[Jackdaw33]

Used to be £250 but now down to £200.

[Jackdaw33]

No restrictions on hours worked as state pension is not means tested.

[furrypusscat]

Sorry to hear of your loss. Not age related but if you are living on your own I believe you get a reduction in Council Tax.

[vakayu]

Oh jackdaw that's good then!

[THECORBYLOON]

If you were married or in a civil partnership, there is a lump sum Bereavement Payment of £2,000 and you can also receive Bereavement Allowance for fifty-two weeks.

[vakayu]

If you go to a gov site it will hopefully tell you I do not have a link I am afraid perhaps another Aber will provide it.

[boxtops]

I'm not aware of any benefits, denis, it will all depend on your individual circumstances. I'm drawing my state pension plus still working - the only drawback is that HMRC tax your salary at basic rate so that you can continue to receive your state pension as tax free.

[Mick-the-Miller]

Assuming you've got 30 years National Insurance contributions the Basis State Pension will be £115.95p from April 2015 (currently £113.10p).

[boxtops]

Good point re Council Tax - here you get a 25% reduction if you are a sole occupant of a property. Also look for all sorts old Senior Citizens discounts - B&Q, my vet and hairdressers, cinema, eating places, etc. Get a bus pass (still free here), buy a senior travelcard if you use the train. You sometimes need to ask, but there are plenty of entry ticket discounts out there too!

[boxtops]

PS - also remember to ask HMRC to send you confirmation that once you have retired, you no longer have to pay NI contributions. You need to provide that evidence to your employer, once only - then no more NI deductions.

[LyndaB]

I'm not sure how it works, but if you carry on working after the state retirement age, you can defer your state pension. Otherwise you will be liable for income tax. I think you can draw it as a lump sum when you do decided to retire

[boxtops]

Hi Lynda - you are right, I deferred my state pension for 5 years, and for every year you defer it, you get an extra 10.4% on the sum you eventually get. Yes you can take part of it as a lump if you do that, but I didn't - I opted to receive the larger pension each week.

[Hymie]

I relation to deferring your state pension in return for an increased pension in later years – this is not worth considering unless you are a higher rate tax payer (income in excess of £42k/year).

As someone receiving a basic state pension (circa £6k/year) plus working well over 30 hours a week – there are very few benefits available to you. However should you have to stop working for some reason, then the state would boost your income (via various means; pension credit etc) to around £9k as part of the guaranteed minimum income – but you would have to claim the benefits and cannot expect the DWP to pay you this by default.

[New Judge]

“I relation to deferring your state pension in return for an increased pension in later years – this is not worth considering unless you are a higher rate tax payer “

This is incorrect, Hymie. One's tax position has nothing to do with it.

Assuming that the “triple lock” will apply giving State pensioners an increase of a minimum of 2.5% per annum, non taxpayers will see their cumulative take from the pension pot in profit after 13 years of pension receipts if they defer by one year, after 14 years if deferred by 2 years and so on up to a profit being shown after 17 years if they defer by five years. Paying tax (be it at 20% or 40%) makes no difference to that calculation because whatever you receive will be taxed at your prevailing rate.

When deferring your pension the gamble you take is on your life expectancy. If you live longer than the periods I have explained above you are in profit, if not you show a loss (though since you'll be dead it should not worry you unduly!). But you must bear in mind, of course, that you may be better placed to spend your pension whilst you are younger.

The increased rate is indeed 10.4% for each year of deferral for those reaching State pension age before 6th April 2016. For those reaching pensionable age on or after that the rate of increase is 5.8% for each year of deferral.With this reduced reward for deferral it takes 24 years to show a profit by deferring for one year.

[boxtops]

I didn't know that, NJ, that the deferral rate is set to reduce in the future. Worth remembering when others ask.

[Hymie]

Even if I knew for sure that I would live until age 85, I would not defer taking my state pension.
By deferring by one year, I might be better off from age 79 – but I don’t know many 79 year olds where extra money would make any applicable difference to their lifestyle.

On the other hand, if you are earning over £42K a year and draw your state pension, this extra pension money will be taxed at 40%. Assuming that once retired, your income does not reach your tax allowance, by deferring your state pension by 1 year, you will be better off after less than 6 years.
Even if you end up considering that you will pay 20% on your state pension (once drawn), which is likely if you have other pension income – then you will be better off in just over 7 years.

[Hymie]

appreciable (not applicable)