At the age of 79, Jan Williams considers herself to have been born at a lucky time as she was one of the women who were able to officially retire and take their state pension at the age of 60.
However, Jan, who lives in London, deliberately decided not to take her state pension at the eligible age and instead carried on working in her job as a teacher.
As a result, when she finally took her state pension at the age of 66, she not only benefitted from a lump sum, but received a more generous state pension for deferring – which amounted to a 10.4 per cent rise on the state pension for each year deferred.
The mum-of-one and grandmother-of-four told The i Paper her decision to defer her pension proved wise as she is now more comfortable and able to be generous towards others as she is not worried about money.
“When I reached the age of 60, I was still teaching full-time and enjoying it and I did not want to retire at that point,” she said. “So I just didn’t claim my state pension and carried on working full-time until 2010.”
Jan’s late husband, Richard, retired from his university job in 2010 and in September of that year, Jan began taking her teacher’s pension, with a lump sum and then regular payments. She decided to carry on working as a teacher part-time.
“We had paid off our mortgage in 2009. We lived off my teacher’s pension, my husband’s pensions and his state pension and the money I earned working as a teacher three mornings a week. Taking my state pension then didn’t make sense as it would have pushed me into the higher tax bracket.
“By deferring my state pension, it not only meant I avoided paying more tax, it also meant that when I did finally receive my state pension at the age of 66-and-a-half, I received a higher amount of state pension.”
Jan with her late husband, Richard. She says people today should think hard about deferring their state pension due to the age limit changesPeople can decide to defer taking their state pension – and if they do, they receive an uplift for doing so.
The level of uplift depends on when you have reached state pension age. For those who reached state pension age before 6 April, 2016 – such as Jan – the rate of uplift is 1 per cent for every five weeks you deferred. This works out at a 10.4 per cent increase in your state pension if you defer for 52 weeks.
The current rules mean that those who reached state pension age on or after 6 April, 2016 receive the new state pension, and receive a 1 per cent increase in their weekly state pension payment for every nine weeks that payments are deferred – equivalent to around 5.8 per cent extra income for every full year deferred.
Jan said: “I was born in 1946, so I could officially retire at 60. But instead, I worked in teaching up until the end of the academic year of 2012.
“Because I have an autumn birthday, I was almost 66 at this point. I then had to wait until the April of 2013 before I could claim my state pension – so was 66-and-a-half by then.”
Jan says even though deferring the state pension worked for her, she does not think it would work now with the increased pension age and the lower reward for deferring.
“If I had been born later, I would not have been in a position to collect my pension at 60, so the chances are that I wouldn’t have been able to work for such a long time after retirement age. Teaching is a rewarding job but it takes a lot out of you.
“Deferring your state pension at 60 for over six years is very different from deferring it for that long from the age of 66 or 67.”
Jan says that some people say she should have taken her state pension at 60 regardless and invested it. However, she says if she had taken it, she would have been taxed more heavily and it is something that needs to be carefully weighed up.
Jan says deferring her state pension has allowed her to be more comfortable in life now“By not taking my state pension at 60, I was able to put off paying higher tax on my pensions. When I did fully retire and take my state pension, I did not pay higher tax as I was no longer working.”
It is only now she has found herself sometimes paying higher tax on her pensions as a result of her husband dying six years ago and receiving half his university pension – and the fact she takes on the odd education connected jobs on contracts.
“I now get my teacher’s pension, my state pension, half my husband’s university pension and a pension from another company he worked for,” she said. “I have to pay higher tax from time to time.”
Jan estimates she receives a combined annual pension of around £44,000 a year.
Your next read
square MONEY‘I’ve been rejected from KFC three times’: The young people who cannot find a job
square PROPERTY AND MORTGAGESWe became first-time buyers in our 40s – and bought our dream four-bed home
square MONEYI planned to retire at 66 but will have to delay it – I need the money
square PENSIONS AND RETIREMENT ExplainedReform wants to change your public-sector pension – experts say it’s a bad idea
“The more generous state pension I now receive has made my life more comfortable now,” she said. “It means I don’t have to worry about money and I can sustain my house and pay all my bills.
“It also means that I can be more generous – not only to my son and his family and my grandchildren, but more generally generous. I am always saying to people: ‘I’ll pay for this’, because I know I can afford to.
“I definitely believe that my decision to defer my state pension allowed this to happen.”
Hence then, the article about i m glad i delayed taking my state pension i don t have to worry about money now was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( I’m glad I delayed taking my state pension – I don’t have to worry about money now )
Also on site :