Does Part Time Work Affect Your Pension?
Q.
I am looking for a Saturday assistant. I have been approached by a gentleman who is retired and receiving a pension.
If I employ him will this affect his pension? He will be working 6 hours a week. He is worried about losing his pension if I take him on.
(Mrs Juli Murray, 2 October 2008)
A.
Working When Retired
While six hours per week may not seem likely to bring in a large income, and may not have a bearing on pension amount, it may make a change to actually paying tax. The main issue will be with taxable income, a figure that can change each year. Part-time work during retirement does still count as taxable income. The good news is that the tax-free allowance is usually higher when a person reaches retirement, meaning that you will be able to earn more before paying any tax. A person who is retired and claiming their state pension and then decides to resume work will need to work out whether or not the extra employment income will affect their tax free allowance. This can be done adding up all of your taxable income and then comparing this amount to the amount you are allowed to earn before paying tax.Tax Free Allowance
There are numerous forms of income that are classed as taxable. Taxable income will include all state and occupational pensions, employment earnings, interest made from savings, money from benefits, some income from property, and income from various shares. However there are a number of income sources that are not taxable such as pension credit, premium bonds, certain benefits such as income supports and lump sum pension benefits. Tax free allowances will also include the basic personal allowance that is applicable to everyone and this limit does become higher the older you are. To work out if your part-time employment earnings will make a difference you will need to subtract your tax free allowance from your total taxable income including the new earnings from your part-time job. If there is money left once you have subtracted then you will need to pay some tax, if there is nothing left then you should not be paying any tax and may be entitled to a refund. Also bear in mind that there are certain allowances that can decrease your tax bill such as married couple’s allowance. Anyone who is working after retirement will also not have to pay any National Insurance Contributions. You can find more information on the tax free allowance from government offices such as the Department for Work and Pensions.Interested in Branding, a Website or Graphic Design?
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I want to employ a lady drawing a private an state pension on a casual basis ,how much can she earn before paying tax she is 68 years old .
Sassy - 23-Feb-21 @ 8:20 AM
I am on a NHS pension from my late husband's work. I live in a Council house and pay full rent and Council Tax. I've just been offered work 12 hours a week, will it affect my pension. I also have husband's Superan'.
Mac - 13-Oct-20 @ 5:11 PM
Im 66 and a widow and recieving state pension. I was recieving nearly full housing benefit. I have just started a job 16hrs a week. I paid £34 a week tax and also now haveto pay full rent and council tax. I am 21 pounds a week better off for working all those hours less my petrol money. Is it really worth trying to make a bit of extra money. Also tired out at the end of the week.
Trisha - 14-Aug-20 @ 10:36 PM
England is a shamefull place to live . Tha government does not want to see any one rise out of the gutter . That's why you can't work any extra hours whilst on the old age pension with out it effecting your pension . It's all about not letting anyone rise out of the gutter .
Ron - 21-Aug-19 @ 11:22 PM
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Molly - 21-Jul-19 @ 10:54 AM
I want to know i am 55years of age been working all my life i work 25hours a week and live on rent i do not claim any benefite byt struggle every month looking at my money for paying bills i am never late paying bills can you telk me am i elgibile for any benefits please
Raj - 5-May-19 @ 11:56 AM
My wife retired this march and we are getting pension credit, but I am 61 and have a casual job. I am working 10 hours some weeks and sometime less sometimes more. Is it okay if i work more hours some weeks as long as by the end of the yearit adds up to 520 hours in the year.
John - 23-Mar-19 @ 5:54 PM
If receiving pension tax credit and/or council tax benefit there seems to be an appalling lack of information as to the impact of any possible earnings on entitlement to such benefits.
The lack of clarity (in tandem with beaurocratic difficulties in coping with claims in changing circumstances) creates massive barriers and disincentives to anyone considering earning options, whether through hobby incomes, part time work...often inconsistent self employed work...or through rental income (also unreliable).
These problems appear to mirror the difficulties experienced by those currently at the mercy if universal credit.
Is there any realistic way to cast light on this issue? From a personal perspective I cannot afford to put myself at risk financially...so I am inhibited from trying to earn. (I ran saving down to zero before finally getting help to claim council tax benefit which turned out to be so complex a d ramified that I never want to go through the procedure again). If my feelings are representative of others across the nation it is a very sad reflection of the state of our country and does not sure well for our productivity.
Any clarity on these matters would be if help. Maybe a campaign is necessary to promote action and change?
Vic - 12-Jan-19 @ 12:23 PM
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can istill keep mymy state pensions yes or no????
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amuri - 5-Dec-18 @ 9:45 AM
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I have just been told, the house sale has fallen through, I am in a total panic as I will not be able to afford to pay my rent, council tax, bills and food, out of my pension alone. If that happens I could become homeless. Any advice very much appreciated.
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Duff1 - 15-Sep-18 @ 1:03 PM
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Karen - 23-Aug-18 @ 6:43 PM
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Harry - 20-Aug-18 @ 9:52 AM
My husband receives pensions credit. How many hours can I work with out claiming it. I'm not pension age yet.?
Herflick - 14-Jul-18 @ 7:54 PM
paul - Your Question:
I am 65 on 3rd july.2018. date given for state pension 06/03/2017. age then was 63years 8months and 3 days.I want to continue working.part time,I do 10 hours per week. I hav'nt intentionally defered my pension claim,so am a bit worried that because I get housing benefit I should inform pensions people.If they reduce my benefit I wil have to pay the difference,And I cannot afford to do this.what shall I do?
Our Response:
You can choose to keep on working, whether paid or on a voluntary basis, while claiming your State Pension. Any money you earn will not affect your State Pension, but it may affect your entitlement to other benefits such as Pension Credit, Housing Benefit and Council Tax Reduction (help with your rates in Northern Ireland), please see link here. It would be worth speaking to someone at Citizens Advice Bureau or the DWP to see what your best options are.
FinancingRetirement - 19-Jun-18 @ 11:39 AM
I am 65 on 3rd july.2018.date given for state pension 06/03/2017. age then was 63years 8months and 3 days.I want to continue working.part time,I do 10 hours per week. I hav'nt intentionally defered my pension claim,so am a bit worried that because i get housing benefit i should inform pensions people.If they reduce my benefit I wil have to pay the difference,And i cannot afford to do this.what shall i do?
paul - 18-Jun-18 @ 3:36 PM
I am a pensioner claiming housing benefit, how much am I allowed to earn
Maz - 15-Apr-18 @ 2:59 PM
FinancingRetirement - Your Question:
liz - Your Question:
I am due to retire on the 6th of july and want to carry on working I work 20 hours a week on minimum wage what tax will have off is it worth carrying on I have no morgage or any other pensions
. Our Response:
You can see more via the link here, which should help answer your question.Our Response:
You won’t usually pay any tax if your total annual income adds up to less than your annual tax personal allowance of £11,500. Any income earned over this amount is taxable.
FinancingRetirement - 6-Mar-18 @ 2:39 PM
liz - Your Question:
I am due to retire on the 6th of july and want to carry on working I work 20 hours a week on minimum wage what tax will have off is it worth carrying on I have no morgage or any other pensions
Our Response:
You can see more via the link here, which should help answer your question.
FinancingRetirement - 6-Mar-18 @ 2:37 PM
i am due to retire on the 6th of july and want to carry on workingi work 20 hoursa weekon minimum wagewhat tax willhave offis it worth carrying oni have no morgageor any other pensions
liz - 6-Mar-18 @ 12:58 PM
I am 55yrs in march 2018...l can take my pension from my previous job of £6, 000 a year. I would still like to work part time. How much can l earn before the pension gets taxed. Thanks
Mazza - 28-Dec-17 @ 12:14 PM
Den - Your Question:
I'm 67yrs pensioner, my state pension & 3 small occupational pensions.I get small help with my housing & council tax benefit. I'm looking to work part time, will it affect my housing & council tax benefit?
Our Response:
You can see more via the Turn2Us link here .
FinancingRetirement - 12-Oct-17 @ 10:43 AM
I'm 67yrs pensioner, my state pension & 3 small occupational pensions.
I get small help with my housing & council tax benefit. I'm looking to work
part time, will it affect my housing & council tax benefit?
Den - 11-Oct-17 @ 5:20 AM
Graham smail - Your Question:
If I was to retire at 60 and start using my civil service pension, can I do some part-time work without getting taxed,how many hours a week am I aloud to work.graham
Our Response:
You are able to earn or receive up to £11,500 in 2017-18 tax year (April 6th to April 5th the next year) and not pay any tax. This is called your Personal Allowance. If you earn or receive less than this then you’re a non-taxpayer, please see link here.
FinancingRetirement - 15-Sep-17 @ 2:41 PM
If I was to retire at 60 and start using my civil service pension, can I do some part-time work without getting taxed,how many hours a week am I aloud to work.graham
Graham smail - 12-Sep-17 @ 7:05 PM
I am 65 and my wife is 56 , I now get my state pension and is topped up with guaranteed pension credit to bring our money up to minimum amount for a couple, we also get our rent and council tax paid in full. My wife wants to get a part time job to enable us to go out occasionally because at the moment we have very little spare money. Will we be worse off if she works part time. Thank you . Sammy
Sammy - 1-Sep-17 @ 10:58 AM
If i worked between 25to 30 hrs a week how does this effect my state pension payment
Len c - 11-Aug-17 @ 5:46 PM
