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TonyTax
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I am 62 years old and married. My wife is 54 years old I

Resolved Question:

I am 62 years old and married.
My wife is 54 years old
I have decided to stop working as I have enough capital (in AVC) on which to live until I officially retire in June 2018. I do some unpaid voluntary work.
I have checked and I have paid 35 years NI and so will qualify for a full new state-pension...
My strategy is to remove £10600 per annum to live on, this seems to be working well (so far, so good)
Is this a valid strategy, will I end up owing income tax following this plan and should I still be paying N.I. annually?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Let me take a look at this for you.
Customer: replied 1 year ago.
OK
Customer: replied 1 year ago.
Do you need more information?
Expert:  TonyTax replied 1 year ago.
Not at this time.
Expert:  TonyTax replied 1 year ago.
The personal allowance is £10,600 so if you keep your income at that level for 2016/16 then you won't pay any tax. As to whether its a valid strategy, different people have different attitudes and its really down to you to decide what you want or need. Some don't mind paying basic rate tax, some take their pension as soon as they can, some have to take income as they may have significant outgoings.
When you take your state pension and any other pension you may have, that will be taxable income so you will need to reassess your priorities then. You can defer your state pension and take a larger one later on or a lump sum.
You only pay NIC if you are working. As you have the required 35 qualifying years for state pension, I see no point in paying voluntary NIC.
I hope this helps but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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