How does working part time affect your pension?

Many of us are looking to work part-time to balance the many demands on our time – while giving us more income .  You might be looking to work part time after retirement. This article looks at part time working and pensions, and will help to answer some common questions…

Savings & Pensions

 

How does working part time affect pension rights?

In any job, it’s illegal for an employer to treat a part-time worker differently from someone doing the same job, full-time. You have the same rights to join your employer’s workplace pension scheme or to be automatically enrolled.  So part time workers’ pension rights are the same as those of full time workers.

Do remember that as a part-time worker your earnings are likely to be lower than someone who works full-time, and so your pension benefits will also be lower.

You can find out more about your rights as a part-time worker on the Government’s website.

Claiming state pension and working part time

Many of us are worried that the state pension won’t provide enough income, and so are considering finding a part time job. There’s nothing to stop you continuing to work – either full time or part time – after state pension age. So the answer to the question “will my pension be affected if I ?” is a clear no.

You can claim your state pension while working. You can also delay accessing your state pension, which will give you larger weekly payments once you do start claiming it.

An advantage of working past state pension age is that you no longer need to pay National Insurance. You may pay tax, though, depending on your total income (there’s no tax on your state pension).

Pension credit and working part time

Pension credit is an income-related benefit aimed at people over state pension age who are on low incomes. You may be eligible for a weekly top-up to your income via pension credits.

Before you decide to work part-time to supplement your retirement income, do check whether you might be eligible for pension credit. The government believes that 60% of those eligible aren’t currently claiming this benefit.

Can I take my private pension and still work?

Yes. Much as with the state pension, you are able to continue to work as long as you like post state pension age. It’s illegal for employers to force any worker to retire unless the role requires certain physical abilities or there’s a legal age limit.

Your pension is your own and there aren’t usually any age limits on when you have to start drawing on it. Speak to a financial advisor to work out the best approach, as there are often lots of different options in financial planning for your retirement.

How many hours can I work after retirement?

There’s no legal limit on the number of hours you work, just as  there’s no longer a formal ‘retirement’ age. You can continue to work full or part time for as long as you wish.

Just make sure that your health isn’t affected by the level of your work and that you have a balance of work and leisure time that suits you.

Working past retirement age – your rights

All workers, no matter what their age, have the same employment rights. It’s unlawful to discriminate against anyone at work because of their age.

An important right to be aware of is your right to flexible working – if you would like to work remotely or change your hours you are legally entitled to request it. There’s lots of advice about flexible working requests – and other workers’ rights – on our pages.



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