Shareholders - Income shifting

[Fred Bloggs]

The other advantage will be her state pension. Paying her 6k (which costs absolutely nothing in NI) will get her 1 years worth of entitlement. Now (or is it next year) the requirement drops to 30 years fpr full state pension entitlement.

Ok, it's not going to make a huge difference when you retire, but it will be a damn site better than a poke in the eye with a sharp stick.

My Pension forecast from 2 weeks ago shows me as having 30/30 pension entitlement. I'm 51 years old and have worked since being 16. I'm wondering whether to reduce my 10k salary next year to save NI.

[Ruprect]

My Pension forecast from 2 weeks ago shows me as having 30/30 pension entitlement. I'm 51 years old and have worked since being 16. I'm wondering whether to reduce my 10k salary next year to save NI.

Do it, and put what you've saved into a pension. It'll be worth more than the govt will give you.

HTH.

[ASB]

My Pension forecast from 2 weeks ago shows me as having 30/30 pension entitlement. I'm 51 years old and have worked since being 16. I'm wondering whether to reduce my 10k salary next year to save NI.

The only benefit you will be getting from that NI (approx 1100 in total) is a tiny bit of serps (or SSP2 whatever they call it this week). No idea how much benifit you'll from it but I think I can guess.

You might (or might not it may have gone up to 55) be able to consider immediate vesting in the pension. This can potentially be a good wheeze. Basically stuff your salary down to 5k, save 1100 in NI. Chuck the 1100 in NI at the pension, get the tax rebate, take 25% lump sum (of course of the inflated amount with relief). The remaining fund used to purchase an annuity. It can be effective as part of pension planning for some.

Equally of course you could just chuck the 100 you have saved into a pension for a few years. Obviously charges etc need to be considered.

TBH just stick it in a biscuit tin and it'll probably be better for you in your dotage than whatever you get of SSP2.

[Fred Bloggs]

Hmmm, thanks. I think I will reduce my salary next year down to about £6k. I cannot see a downside quite frankly. The NI I save, I will put into my SIPP.