Working in retirement
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Many more people are considering working
later in life, some because they want to continue to work and others bourn from
necessity. The rules concerning working and drawing a pension are a little
complex and slightly odd.
State Pensions - You can draw your state
pension at your State Pension Age and this is the case whether you are working
or not. i.e. Your ability to draw your state pension is unaffected by
whether you are working or not.
Company Pensions - This is more complex and
is described below.
Private Pensions - You can convert your
private pension pot to an annuity irrespective of whether you are working or
not. However when and how you can convert your pot are governed by the rules
surrounding private pensions. Therefore read the Pensions guide section on
Individual Pensions to understand what you can and cannot do with your private
pension.
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Can I draw my company pension and
continue working?
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There are two situations here
1. You wish to draw a pension from the same
company as that for which you are working. Under the present rules you are NOT
allowed to do this and you must cease working if you wish to draw this pension.
2. You are drawing a pension from a different
company from that for which you are working. As the rules stand at the moment it
is possible to draw this pension.
This leads to a slightly odd situation. Lets
assume that you are working for company A and they have provided you with a
pension scheme from which you would like to start receiving a pension. However
you cannot start to receive this pension until your employment ceases with
company A. The rules do however permit you to stop working for company A and
start to be employed by company B. You would then be able to draw your pension
from company A. These are clearly very peculiar rules, but that's just the way
it is at present!
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Will working mean I get less state
help?
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Your basic state pension and additional state
pension are unaffected by the level of any other income you earn in retirement.
However some other benefits will be affected the amount of other income or
capital you might have.
Fuller details are given in the guide to
State Pensions.
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If you have a pensions
related question then please let us
know.
If it's something other people
would find useful then we will post an answer in our Frequently Asked Question
(FAQ) area.
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Tell a friend about
Essential Pensions. Send an automatic message to your friends
email account about the site.
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Use our online calculator
to get an estimate of your basic state pension.
Its free and
simple to use you can even include it on your own website!
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Get the FREE Pension calculators from Essential Pensions.
No money, no
registration, just include one line of HTML in your web page.
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Read the guide to
investment in the pensions guide. It explains what you need to
think about before investing for your retirement.
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