Pension TRICIA PHILLIPS

QI’VE got a pension forecast for my retirement in 10 years.

I’ve been told the maximum I can expect will be £175 as I have completed 40 years.

Is there any way I can increase my pension and can I stop my contributions now?

ATHAT is the current full new state pension. The amount you receive is based on your National Insurance record and you need at least 10 qualifying years to get any state pension and 35 complete qualifying years to get the full amount.

You don’t pay contributions towards your state pension but your NI contributions help to build up your entitlement to it.

You need to continue paying NI until you retire – however many years you have been paying it for.

QI’M IN my late 50s and have taken a dip in my income due to the pandemic.

Can I take some money out of my pension to help me out?

AIF YOU have a defined contribution pension you can access it from the age of 55.

If you are in a defined

You can take out up to 25% of your pension tax-free but be mindful of the consequences benefit (final salary) pension your scheme will have rules around the age you can access it and you will need to check where you stand.

You will pay tax on any withdrawals above the 25% tax-free allowance, and if you take cash out while you are still working, you may push yourself into a higher tax bracket and pay more.

Also, consider how this might affect your ability to keep building up your pot until you retire.

If you take more than the 25% tax-free sum from your pension, there is a limit of £4,000 a year on how much you and your employer can contribute in future.

QWE ARE thinking of gifting our children some cash. Are there any tax implications if we do this?

AIN THEORY you can gift as much as you like, but anything over your annual gifting allowance of £3,000 each per year for inheritance tax purposes will become a potentially exempt transfer, and the seven-year rule applies before the gift falls outside your estate.

QIS THERE an age at which you should take out life insurance? I’m about to buy my first property and trying to work out which financial products I now need.

AIF YOU are single and don’t have any dependents, there may be other forms of cover that could be more useful to you at this stage in your life, such as critical illness and income protection – insurance that could help you to survive financially should you fall ill or get made redundant.