Early Retirement

[shteve]

I have recently taken early retirement (age 60) from the NHS, with a good lump sum and a modest monthly payment. What can I claim to supplement my income by way of tax credits, rebates etc.? Are there any out-goings (NI?) I need to maintain? Any and all suggestions and advice most gratefully received, thank you!

[vakayu]

I cannot advise but would just like to say lucky you and hope you enjoy your retirement,I am sure you have earned it,the way the NHS is going maybe you got out at just the right time.

[ummmm]

You can't claim anything if you have savings of over 6k.

[ummmm]

If you have 16k you wouldn't be entitled to hardly anything. You're right though, you don't have to declare anything under 6k.

[Sipowicz]

I thought you could only claim pension credit if you are receiving the state pension?

[Sipowicz]

Thanks.

[Sipowicz]

?
https://www.gov.uk/pension-credit/eligibility

[Sipowicz]

Just to clarify, Shteve is a 60 year old male, he cannot claim pension credit until he reaches Pension credit qualifying age, currently 65 for a man. This will rise in line with the state pension qualifying age.

[Prudie]

As a public sector employee I'm very surprised that you didn't get loads of blurb on stuff like this from them as you prepared for retirement. Were you not offered a pre-retirement course as well that deals very effectively with these kind of questions? I'm public sector and I know we get all this kind of information as we approach retirement, early or otherwise.

[Buenchico]

There seems to a lot of confusion here about the qualifying age for Pension Credit. Quite simply, it's the age at a WOMAN becomes eligible for her State Pension. That used to be 60, meaning that BOTH men AND women were eligible for Pension Credit at that age (because a man was treated in exactly the same way as a woman born on the same day as him). However the woman's pension age has gradually been rising meaning that, for example, I won't become eligible for Pension Credit until I'm 63 years and 2½ months old. (I was 60 in April last year).

You can check the age when you'll qualify for Pension Credit here:
https://www.gov.uk/calculate-state-pension/y

The age for a free bus pass is the same as the age for Pension Credit in England (i.e. it's rising) but has been held at 60 in the rest of the UK.

The PAYE tax system works on the assumption that you'll keep earning at the same level throughout the whole of a tax year. That means that if your level of income drops during the year you'll have overpaid Income Tax. If you're continuing to pay Income Tax that overpayment can be refunded by simply charging you less tax for the rest of the year or by an end-of-year refund. (However, given that we're not very far into a tax year, any refund of what you overpaid between the start of the tax year and your retirement will be very small anyway).

You'll have almost certainly paid enough NI contributions to qualify for a full pension, so there's no point in making any voluntary contributions. However if you take on employment (where your earnings are over the NIC threshold) you'll still have to pay NICs until you reach your own State Pension age (not that of a woman of the same age). Then you can submit a 'certificate of age exception' to HMRC so that you no longer have to pay them.

If you're on a fairly low income it might be worth checking (with your local council) whether you qualify for any discount on your Council Tax.

You're now eligible for a Senior Railcard, giving you a third off rail travel. It costs £30 for one year (available from staffed stations or online) or £70 for three years (online only). However some local councils offer 1 Year Senior Railcards, through their own offices, for less.

National Express offer a similar scheme, where a £10 card gets you a third off coach travel for a year:
http://www.nationalexpress.com/waystosave/senior-coachcard.aspx

[Sipowicz]

Thanks for that Buenchico.

[Baldric]

I'm retiring at the end of June, (63 in July) have been told I can claim Pension Credit.

[ummmm]

Wow Baldric....I pictured you much younger.

[factor-fiction]

Yes, if money is an issue it's it's always best to sort all these things out before taking early retirement. It may be too late to ask your ex employer /union but CAB may help. There's no harm in ringing DWP or going down to the Job centre to see if you can sign on. You could also let HMRC know- there may be a small tax rebate due, although you may have to wait a while.

[jno]

free medicine from the NHS.

[shteve]

Many thanks everyone, for your kind thoughts and advice, much appreciated!

[twix123]

You won't pay any NI contributions on your Pension Income.