Timothy Sumer

It may seem odd to think about contributing to a pension after retirement, after all, retirement is the time you should be spending your pension, right? Well, yes of course, that is certainly one option. But in the early years of your retirement, you might still be working a bit or not need as much from your pension. You might utilise other sources of income first like cash savings, rental income, an inheritance or even other different types of pensions. Here are three reasons why you might want to consider contributing to a pension after retirement: 1. Tax relief. What you pay into a defined contribution pension is topped up by the government via tax relief. For example, if you pay in £8,000 into a pension, the government will top this up by £2,000. That’s a 25% return! Plus if you are a higher rate Income Tax payer you can claim further tax back. Also, if you are still working part time, your employer will likely pay into your pension too! 2. Tax free growth.

Even if your State Pension forecast shows you as having paid 35 years of National Insurance Contributions you might not get a full State Pension. There was a big change to the State Pension system back in 2016 and this has resulted in the government trying to make things simpler going forward but with lots of complications in trying to cobble together all of the old rules. Let me explain why you might not have built up a full State Pension even though you have 35 years on your record and what you can do about it. You might not get a full State Pension if you contracted out. Your State Pension forecast will show you your current position. The full new State Pension which was brought in on the 6th April 2016 is currently £179.60 per week (2021/22 tax year). Normally, you need to have paid 35 years of National Insurance contributions to qualify for the full new State Pension. However. Back in the day many workplaces offered pension schemes that allowed you t

Knowing the answer to what pension will I get? Is crucial in understanding what sort of lifestyle you will have in retirement. Will your pension produce enough so you will be comfortable with financial security and flexibility or will you just get by? Maybe you will be comfortable, financially free and able to enjoy lots of life’s luxuries. This video is part of a series of videos that will give you an idea of what pension you might get and how to find out. DEFINED CONTRIBUTION PENSIONS - ANNUITY Most people today will be paying into a defined contribution pension. You pay in, your employer pays in and the government gives you tax relief which also helps top up your contributions. For someone who is low risk and wants certainty for their retirement then the default option to turn your defined contribution pension pot into income is to go for an annuity. Essentially an annuity is where you give over your pension pot to an annuity provider and they will pay you an inco