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The evolution of retirement and its impact on your pension

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  Posted by: The Probe      3rd April 2020

By Michael Lansdell

Last year, there was a huge increase in the amount paid in voluntary National Insurance Contributions (NICs). Figures from HMRC showed the amount collected from Class 3 (voluntary) NICs in 2018/19 was £119.3m, compared to £12.8m in 2016/17.[i]

The reasons for this leap? Since 2016, the amount of State Pension you receive is dependent on your National Insurance record. Many people will have gaps in their NICs history, perhaps due to being self-employed, working abroad, or a period of unemployment without claiming benefits. To put it briefly, if you’ve got 35 years plus of NICs, you’ll get the full amount; between 10 and 34 years, you’ll receive a proportion of the full amount and less than 10 years, you may not be eligible to receive anything at all. Of course, as with anything pensions, there are different layers to calculating what you could expect to receive and all sorts of circumstances will come into play.

Rethinking the traditional model of retirement

There is much to think about with pensions – both state and personal – as well as retirement in general, because the goalposts have changed. In the UK, we are living and working longer. As well as life expectancy going up, the percentage of people of a pensionable age still in employment has doubled since 1998.[ii] There is no traditional ‘model’ for retirement; in dentistry, many are continuing to work part-time later in their career; if not in practice, in education, training or consultancy and the like. For dentists and dental practice owners, a fulfilling work-life balance often means combining ‘keeping your hand in’ and remaining connected to the industry with more leisurely pursuits associated with retirement.

But it’s still wise to have goals and constantly review both your State Pension provision, plus any personal plans you have invested in. Do you need to top up your voluntary NICs? It’s important to note, topping up doesn’t always guarantee you will increase your pension. Make sure you consult your specialist dental accountant on this. What are your expectations for later life – more and more people can’t imagine not working at all, because it keeps them mentally active and also because they love what they do!

Pay attention

With pensions, the only certainty is that one size does not fit all and the rules are always subject to change. There have been several changes over the last few years; the tapered annual allowance came into force in 2016 and, after 6 April, all Adult Dependency Increase (ADI) payments as part of the State Pension will stop completely – these are just two recent examples.

Dental practice owners are not likely to find themselves relying solely on their
State Pension, but paying close attention to what’s going on in the world of pensions is essential to avoid any ticking timebomb. Understanding how the concept of ‘retirement’ has evolved (many now retire ‘gradually’, rather than take their carriage clock and run) and being honest about your own wishes and expectations for the future is also key.

The government has various online tools to help – look at the pensions’ section of its website – but the advice of a specialist dental accountant is worth its weight in gold. Lansdell & Rose, as well as financial planning for business, offer support with how to maximise your personal finance, freeing up more money for you, your family and whatever future you would like to see.


To find out more, call Lansdell & Rose on 020 7376 9333,

Or visit


[i] Surge in people topping up their state pension., 16 October 2019. Link: (accessed January 2020).

[ii] How would you support our ageing population? ONS, 24 June 2019. Link: (accessed January 2020).

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