Great Western Coffee Shop

A once in a lifetime day - the day that (according to the state) I'm retired.  I start collecting my pension - though it's paid the end of th emonth in arrears.  I celebrate - though it's not my birthday as (at the moment) the government is cranking retirement age later and I've just caught up with it. I have my bus pass - but am locked down, and in any case all the buses to Bath from our place have been withdrawn. And I'm a man of leisure now - though a one hour meeting and a 90 minute seminar, with preparations and follow ups (follow ups for seminar to be written up at first light) make me wonder what the definition of "leisure" is and what has changed.

If I had a pound for every time I heard “I’ve never been so busy since I retired” I’d be a lot richer.  ;D

Seriously though congratulations on reaching your latest milestone.  As well as your bus pass gathering dust you also have a senior railcard itching to be used.   Let’s hone it is not long before you can use one or both.

I'm looking forward to catching the bus down to the station and carrying on to ... it could be anywhere from Abbey Wood to Ystrad Rhondda. 

Ystrad Rhondda?

I think you will find our English bus pass's are not valid in Wales,although I THINK they are valid to the Newport(South Wales) area from Bristol.

Maybe some one who has used their bus into South Wales could clarify

I expect to pay 66% on my railcard once I transfer to the train.

ENCTS cards are valid on international local buses all the way - so the Severnside Express (I think it is called) is covered to Newport ... except I think it got cut back to Chepstow, then First sold or gave the route so Stagecoach (last Autumn) and Stagecoach are pulling out as well now.

Although South Wales and West of England are working together in a "Western Gateway business partnership" - https://www.gov.uk/government/news/cross-border-western-gateway-will-form-new-powerhouse-in-uk-economy - the public transport between them could do with a bit of attention.

Coach and Bus Week (https://cbwmagazine.com/stagecoach-withdraws-severn-express-and-x14/)

Congratulations Graham on reaching and passing another milestone in life. I passed the same milestone some years ago. Haven't claimed my state pension, it increases 3% or 6% (can't remember which) each year you delay claiming it. Plus I still have a job that pays me more than the pension. You will also have the pleasure of more immunisations as you get older. I qualify for shingles next year.

What has not helped the bus's is the removal of the bridge toll.

When the train takes you right into Cardiff central,I can understand the withdrawing of the bus services.

Completely off topic, but when you do the calculation it is one of those packages that looks attractive on first sight but the devil is in the detail.

SWMBO was one of the last women to be entitled to her pension at 60. She deferred it for a few years, mainly because she wasn't entitled to much anyway because a large anount of her working life was spent in South Africa. The deal was (for her and I don't think it has changed) is that for each year she deferred it she got an increase of 10%. To illustrate the point quickly here is a back of a fag packet calculation:

Let's just say for simplicity that her pension was £10 per week or £520pa. If she deferred for a year she would get £11 per week. or £572pa, an increase of £52pa. For ever. Very nice thank you.

Or is it?

In order to get that extra £52pa she has gone without the £520 she would have got in the first year. To completely recoup that lost £520 will actually take 10 years. And that length of time increases the longer you defer it. If one should meet with the proverbial double decker bus, or wake up dead one morning after a heart attack in the night, it is very easy to lose money on a deferral - very easy indeed.

I once has a drinking partner in the Two Pigs in Corsham who had a comfortable MOD pension to live on. and decided to defer his state pension because, to quote his words, "it would all go in tax." Well of course it wouldn't have all gone in tax (but you couldn't tell him that), but he went after a short illness aged 67. He never saw a penny of his state pension.

My advice to anybody in this situation is to take the money and shove it in the bank if you don't need it. You never know what tomorrow may bring...

Under the older system for State pensions which applied up to April 2016, a deferral, or a suspension, of state pension earned you an additional 10% pa, or 1% for every 5 weeks, on eventual payment.

The new system gives a deal worth about half that rate.

It is a little known fact that one can suspend payment of a state pension which is already current. I happen to be doing this just now simply to avoid payment of too much higher rate tax. This is a luxury that is not likely to be repeated and soon I will reclaim the pension and probably become fully retired once again. The suspension option can only be exercised on one occasion during retirement but clearly for as long as it is required.   

A very nice problem to have!

At over £9,000 a year, if you have two in the family unit the full state pension is really not that bad these days, particularly if topped up by a private pension of some sorts.  I do wonder whether the "triple lock" which increases it each year by the minimum of average earnings/CPI/2.5% is too generous now, as it means that over years the amount is drifting upwards in real terms.  Nice if society can afford it, but with massive numbers of baby boomers reaching pension age soon, it does seem to be creating a generational inequality.  (Takes cover and waits for the bricks to start flying over my head!)

Hmmm ... happy to comment in generality but not exactly going into personal finances on the public board.   Clearly a topic of great interest (in generality) to many of our members.

The choice was carefully made.    I would not go as far as Robin in saying "My advice to anybody in this situation is to take the money" ... rather my advise would be to very carefully look at your own circumstances, options, and what may or may not happen in the future.    For me, various facts meant that the decision was heavily weighed to "take it now"  and I suspect that would be the case for a high proportion of people.

I was NOT aware of the 'suspend it later if you wish' option - thanks for that; I have learned and squirrelled the fact away, probably only ever of academic interest but knowing the options is forearmed.

Hmmm ... the pension age has been crept up ... ladies from 60 to 66 and going further I believe, so it that more money for a shorter period - has life expectancy gone up by that same number of years, or more, or less.   Yes, look at the number of baby boomers but also consider they've been putting funds in for so many years and there were more of them doing that too. And finally take a look at changes in life expectancy - will the figures be dented by a disproportionate number of people passing on at the moment?

Hopefully you don't take those questions as a brick.

A brick? Only in the sense that I don't know the answer to any of them, but they are very good challenges. I know that the increase in women's pensions was driven by the need for equality (which I agree with, maybe surprisingly as I have been caught by it, but unlike many didn't pretend that I didn't know about it for the last 20 years) - but the men's pension is increasing from 65 to 67 too, so that's probably the one to compare with life expectancy increases.

You're right, there must be a pension saving of some sorts from people dying early from the pandemic, though (and this is pure guesswork), I bet it's dwarfed by the total cost of the wretched virus to the country once this has all played out.

Oh, and best wishes for a long and happy "retirement" too though I suspect it's more in name than reality from the number of things you seem to be involved with.   

Up to a point, about baby boomers. The generational label is based on the timing of the USA's boom - their post-war rise in birthrate - within 1950-1965. In Britain, there was the bulge - 1947, plus a bit of 1946 and 1948 - then a big dip. Our boom was later, during the 1960s, say within 1959-1968. The true booms were shorter, though how much does depend what you mean by. So our years of high population, if that's what "baby boomers" means, have barely started to plan retirement yet. See attached birth graphs (absolute numbers per year).

... and the increase in life expectation that the shift of pension age was based on happened ages ago. Decisions about pensions happen very, very, slowly (apart from the speed-up of the equalisation affecting certain women). Here's a few snapshot values (i.e. not for cohorts) for various birth dates, all for the UK:

birth years	males	females
1950-52	66.2	71.2
1974-76	69.4	75.6
1980-82	70.8	76.8
2000-02	75.6	80.4
2016-18	79.2	82.9

So more than enough to justify the odd year or two later pension age there ...

We loosely planned for our retirement when Marion and I got married almost 25 years ago. Then her retirement age was going to be 60. We took life decisions based on that and then, some years ago, were informed that her retirement age would now be 66. That shot serious holes in to the plan and meant that I was still supply teaching at 69, some four years ago.

It was this 6 year rise that has caught out so many of the mid-1950s women.

That's interesting stuving, though I guess of more interest is those who were born in the generations that have recently retired and will do so in the next 10 to 20 years (which would include the boomers).  

Grahame's implied challenge has got me diverted from rolling gloom, sorry News, and I found a graph* on the ONS site which shows that the male life expectancy of those who reach age 65 has increased over the last generation from 14 years in 1981 to 20 years in 2018. And it's expected to rise by another 1 year every 10 years.  So I think that means that by 2030, if the pension age hadn't been increased, the pension cost of a new retiree would have increased by 50% in 50 years (from 14 years to 21 years?)   My brain is hurting now, too many numbers!
  
*  Sorry, couldn't work out how to include it. But it's here.
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/pastandprojecteddatafromtheperiodandcohortlifetables/1981to2068

One of the best things about advice Graham is that one is under no obligation to take it!   ;D

Of course everybody should examine their own personal circumstances in detail, but many don't, and many (perhaps not necessarily anybody on this forum) may blithely assume that a pension deferral so that they get a bit more later is a good idea. I take a dissimilar view and my simple example (not in any way representing SWMBO's finances, by the way) was given to illustrate it.

There may well be issues such as higher rate tax liability that might cnange the figures, that I accept, and that is another reason why everybody should look closely into their own personal circumstances.

I'm beginning to wonder how Graham come to have just retired ... is he a bit of a Time Lord on the quiet? This is in Dad's army pay book, which records training and specialist skills:

I received my state pension last March at the ripe old age of 65 and 8 months. I had 29 years paid in, and then my remaining 17 years were made up of 9 years credits and 8 years Class 3 voluntary contributions. I was in a contracted out profession (teaching....but this also includes health and social care workers, local council. fire and police, civil service, and armed forces).I was  blissfully unaware of what contracted out meant ,until I  discovered that my state pension was forecasted to be 5/6 of what I was expecting to get, despite having 46 years under my belt.I have been going backwards and forwards between the Pension Service in Wolverhampton and HMRC as they keep giving me different figures. I have had my second state pension payment yesterday and it still does not yet reflect the latest payment I made to HMRC in January!. My advice to folks coming up to state pension age would be to check, recheck and check  again, because it is quite apparent to me that neither agency has a clue what the other is doing or saying!

Thank you ... the move from being rudely fit, healthy and energetic in body and mind, and needing to be so to be able to put away (through state enforced schemes or otherwise) enough for when that is not the case, and indeed when additional costs arise, is not a sudden one.     Whilst there are people - perhaps many of them - who move from a full time job which is all they have known for decades and loved to "what can I do now with all this time?" mode overnight, I am, as you surmise, not one of them.     

Some things have gone, only two of them as unexpected / unwanted shocks, and other allowed to fade.  Other things have been allowed to grow / enhanced or taken on to fill gaps.  The coming of bus pass and state pension is merely the point at which the label changes.  I've noted and marked it,  but it's just a line stepped over in this great field of life, and the field continues for me with little difference.

People with a contracted out career (which includes me) were one of the winners of the pension changes as it enabled being able to make up the state pension from the old basic rate, which was all the contracted out NI was paying for to the new full rate by additional contributions, whether through work or voluntary payments, providing you were far enough away from state pension age. Even paying Class III would pay back over a few years, the exact number depending on your income tax rate.

The current old basic rate is £134.25 whereas the full new State Pension is £175.20 per week. Currently each additional year would give £5 extra per week.

It is important to understand that those retiring before it has fully phased in will only get a proportion of the difference as you need a certain number of years of NI after the date the change 2014? was made.  That is why the Class III contributions you mention are so important.