Working in retirement - Working After Pension Age


When you reach pension age (sixty for a woman and sixty-five for a man), you cannot simply claim your pension. First, you must retire. That normally means that you must earn less than £79 a week, or work fewer than twelve hours a week, or work only occasionally. However, the DWP may regard you as retired if your work is what they call 'not inconsistent with retirement'. These rules about retiring apply for only five years after pension age, until you reach sixty-five if you are a woman or seventy if you are a man. After that you can claim your pension whatever you do.

A married woman who has no entitlement to a pension on her own contributions cannot get her married woman's pension on her husband's contributions until he retires and claims his pension. This rule applies whatever her age. So a woman married to a younger man can face a very long wait for a pension.

Earnings Rules

Even if you do retire, you are not free to earn whatever you like in those first five years after pension age. If you earn over a certain amount, the Government takes back some of your pension under the earnings rule. In fact, there are now several earnings rules.

Under the basic earnings rule, your pension will be reduced if you earn more than £179 a week. You lose 9p of your pension for every 50p of your first £80 earnings over the limit. And you lose 90p pension for every 90p earned over this amount. The current basic single pension will vanish completely as earnings reach £216.19 .

A married man will lose his own entire basic pension at the same level. His wife will lose her pension on his contributions as her earnings reach £411.79. Her pension cannot be lost by her husband's earnings. A man with a dependent wife under sixty can lose his entire pension, including the extra paid for her, through his own earnings if they reach £288.9O. The pension paid for her is also affected by her earnings.

More on Working in retirment

Working in retirement - Fees and Occasional Work

If you are paid each week as an employee, the earnings rule calculation is straightforward. But if you work occasionally, there are special rules about how your earnings are counted.
If you simply work occasionally or irregularly as an employee or on a 'casual' basis, your earnings are counted for the period to which they relate. For example if you do one week's work and get one week's pay of £360, that would wipe out one week's pension.
In either case, your earnings are net earnings after deducting tax and National Insurance and any expenses of working including travel, 19 p towards a meal, and anything else which is reasonable and incurred because of the work.
However, there are special rules for people over retirement age (and their . . . ... see: Working in retirement - Fees and Occasional Work