Although it may be increasingly hard for a low income person to make a clean break from work into retirement the period around the state retirement age is a major transition in your life. It is also a time where the opportunities for things to go wrong with your tax affairs are many and you may be called upon to make a series of important decisions.
Your state retirement age gives you an entitlement to receive your state pension. This may be the same time as you give up work (or full-time work) and also start to receive an occupational pension (from a previous employer) or a pension which you set up for yourself.
It is a time when you have to try and understand the tax rules or otherwise you may end up paying unnecessary tax. It is best to think ahead.
Some actions you can take ahead of your retirement are:
- to obtain a forecast of what your state pension will be (if you decide to claim it when you are entitled).
When the time comes to take your pension you have the facility to claim your state pension through the DWP’s online facility.
It is at this time that you should also consider whether your changed circumstances might entitle you to pension credit, council tax benefit or housing benefit.
In this section we are looking firstly at a couple of decisions which you may have to make at or around retirement. Firstly we look at the option of Deferring your state pension which may be around the same time as you should consider if you have the possibility of Cashing in your small pension.
Finally we look at Tax code problems on retirement and why it is important for you to understand the coding notices that you are sent and if you do not, make HMRC explain them to you.
We also recommend that you read our guide to checking your coding which is supplemented with some pensioner specific examples.
