A recent article by Onrec-The Online Recruitment Resource points to income statistics for pensioners that indicate that more and more people aged over 65 are continuing to work after they officially retire. Choosing to remain in employment can be down to a need for extra income, but staying employed has also been shown to provide many physical and mental benefits, as well as helping to keep up social activity and giving a sense of purpose, which some feel they lose after giving up work.
If you’re thinking of continuing work in some way, it’s worth knowing how it can affect your pension, depending on how you go about it. All state pensions and most private pensions can be deferred, the benefit of this being that your pension has the opportunity to continue growing which, in turn, should give you more money to enjoy when you do stop working completely.
You can also choose to begin drawing your pension whilst continuing to work, but anything you draw will count as income, so any income from both earnings and your pension over your personal allowance will be taxed. You won’t make National Insurance contributions once you’re over state pension age, however, which puts a little more money back into your pocket.
By planning your required income and pensions requirements in advance you can have your cake and a ha’penny! That can be achieved by planning to build a pension pot sufficient to give you the power of choice so that on-going work is an option not a necessity.
As always, if you would like to discuss any of the details contained in this article, please don’t hesitate to contact one of our qualified financial advisors at our Newbury office on 01488 608 686, or by using the quick contact form on our home page.
Please note, the value of investments, and the income from them, may go down as well as up. The levels and bases of taxation are liable to change.
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