John Zammit, 65, rues the day 14 years ago that he decided to continue working soon after retiring early from the bank where he was employed. Little did Mr Zammit know it would have paid him more to stay at home after taking up the HSBC early retirement scheme offer at the age of 51.
Mr Zammit’s decision to do self-employed work came back to haunt him four years ago when, at 61, he started receiving his pension.
“My decision to work for 10 years after early retirement penalised me because the pension I receive today is almost half what it would have been had I decided to stay home and do nothing,” he said.
Mr Zammit’s retirement pension was calculated on the basis that he was a self-employed individual, worked out as an average of his income in the last 10 years.
This gave Mr Zammit a pension of about €525 per month, since his income was not at the high end of the scale. Had Mr Zammit stopped working at 51 on early retirement from the bank, his pension at 61 would have been almost double.
“I had 32 years in national insurance contributions before retiring from the bank, which was more than enough, but they were ignored, he complained. Mr Zammit said retirees in his situation should have their pension calculated over all the years for which they paid NI contributions.
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