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Moved to the Pensions Practical board. Please post there in future! --MDW1954
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samenic wrote:You may need to pay taxes on additional pension income that you receive if you exceed your annual Personal Allowance. If the amount you receive in income from your state pension (including additional pension payments from deferred pension claims), private pensions or company pensions, taxable benefits, or any other income such as employment wages, properties or investments is more than £12,570. If you have multiple private or company pensions, you may want to consider a pension transfer to keep everything in one place, so it’s easier to keep track of. You will also have to pay tax charge on pension payments if the total worth of your state and private pensions exceeds your pension lifetime allowance, £1,073,100.
The last line of this paragraph was the reason for my question
Thanks for your reply
samenic wrote:You may need to pay taxes on additional pension income that you receive if you exceed your annual Personal Allowance. If the amount you receive in income from your state pension (including additional pension payments from deferred pension claims), private pensions or company pensions, taxable benefits, or any other income such as employment wages, properties or investments is more than £12,570. If you have multiple private or company pensions, you may want to consider a pension transfer to keep everything in one place, so it’s easier to keep track of. You will also have to pay tax charge on pension payments if the total worth of your state and private pensions exceeds your pension lifetime allowance, £1,073,100.
The last line of this paragraph was the reason for my question
Thanks for your reply
Smoggy wrote:The point of deferring the state pension isn't to maximise your returns but as insurance against living too long by giving you additional inflation proof income for life. Yes due to the linear nature of the calculation the benefit of doing so diminishes each year you do it, but for the first couple of years at least it's a very good deal.
The effective 5.8% annuity rate in the first year is better than you'd get from any insurer.
Smoggy wrote:The point of deferring the state pension isn't to maximise your returns but as insurance against living too long by giving you additional inflation proof income for life. Yes due to the linear nature of the calculation the benefit of doing so diminishes each year you do it, but for the first couple of years at least it's a very good deal.
The effective 5.8% annuity rate in the first year is better than you'd get from any insurer.
Steveam wrote:Smoggy wrote:The point of deferring the state pension isn't to maximise your returns but as insurance against living too long by giving you additional inflation proof income for life. Yes due to the linear nature of the calculation the benefit of doing so diminishes each year you do it, but for the first couple of years at least it's a very good deal.
The effective 5.8% annuity rate in the first year is better than you'd get from any insurer.
Yes indeed. I viewed my deferral (10.4%) as buying an inflation proofed annuity - insurance against two things: excessive longevity and/or high inflation. The risk, of course, is changes to government policies but the grey vote counts!
My aim was never to maximise the amount received but rather to buy insurance against certain possibilities.
Best wishes,
Steve
Smoggy wrote:The point of deferring the state pension isn't to maximise your returns but as insurance against living too long by giving you additional inflation proof income for life. Yes due to the linear nature of the calculation the benefit of doing so diminishes each year you do it, but for the first couple of years at least it's a very good deal.
The effective 5.8% annuity rate in the first year is better than you'd get from any insurer.
Steveam wrote:Smoggy wrote:The point of deferring the state pension isn't to maximise your returns but as insurance against living too long by giving you additional inflation proof income for life. Yes due to the linear nature of the calculation the benefit of doing so diminishes each year you do it, but for the first couple of years at least it's a very good deal.
The effective 5.8% annuity rate in the first year is better than you'd get from any insurer.
Yes indeed. I viewed my deferral (10.4%) as buying an inflation proofed annuity - insurance against two things: excessive longevity and/or high inflation. The risk, of course, is changes to government policies but the grey vote counts!
My aim was never to maximise the amount received but rather to buy insurance against certain possibilities.
Best wishes,
Steve
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