In our weekly series, readers can email in with any questions about retirement and pension savings to be answered by our expert, Rachel Vahey, head of public policy at investment platform AJ Bell. There is nothing she does not know about pensions. If you have a question for her, email us at money@theipaper.com.
Question: I am aged 73. I became eligible for state pension when I was 65 but chose not to take it at that point because I was in full-time employment and already paying the higher rate of income tax. I retired completely from employment when I was 68 and then chose to take my state pension, which —with my work pension — meant that I was on the lower rate of income tax. However, when I was 70 I started working part-time. This now means that I am in the bizarre situation of effectively paying the higher rate of income tax on a minimum wage. Can I defer my state pension again temporarily.
Answer: For most people their state pension forms a valuable foundation for their income in retirement. Those who claim the new state pension could be receiving over £12,540 a year.
Shorts
But the state pension is now hovering just slightly under the frozen personal allowance – the salary level over which people pay income tax – of £12,570.
