Should I take my State Pension now?
The Government provides a State Pension.
The most you can currently get from the basic state pensions is £122.30 per week, which is £6,359.60 pa. Don’t get carried away on that!!
You can also get additional State pension to top this up depending on how much you have earned during your lifetime and whether or not you contracted out of the State Second Pension in years gone by.
Whatever you did, and however much you have earned, you will have a State Pension due to you when you retire (hopefully will still be there by the time I get there, when I’m 80. Me? Cynical?!)
The question is: When should you take it?
I have had a few clients ask me this recently and the answer, like most things in life is: it depends, especially if you are still working or have an income from elsewhere.
If you have reached State Retirement Age and the Government are offering to pay you your State Pension now, then why wouldn’t you take it? You are entitled to that money. It could be useful to pay for day to day things that you need, or additional things that you wouldn’t have bought otherwise. You could also use it to save into a personal pension and thus increasing your retirement savings and tax free cash amount to use at a later date. You could get taxed on this pension but it’s still more money than you were getting before, so does it matter?
However, you are offered the option to defer taking your State Pension and if you do so then you get more money when you do come to take it, so maybe it is better to go for this. Time travel is the only way for know for certain which option will work out better over time, but I have developed a healthy level of cynicism having been in this profession for over 16 years and so is a bird in the hand worth more than two in the bush?!
Only you can decide.
