How to calculate your deferred pension?
dutchism1958
Posts: 206 Forumite
Dear All,
Wonder whether anyone has a formula for calculating the value of deferred pensions.I appreciate any calculation will be "rough" because we don't know what level of inflation there will be when I retire in 2023.
I have asked a similar question previously,but at that time i was hopeful of returning to work-unfortunately my wife will not be improving to enable me to do this.
I have my state pension which will generate approx £5800 and possibly £7280 when the new plans come into being for flate rate pensions.I have my 30 years NI contributions.
I also have 2 deferred final salary pensions(both closed now).
The first pension is valued at £6600 a year.(Final pensionable salary £54,000).The pre 2009 excess pension of £4770 will rise with inflation to a max of 5% pa until my retirment age. The post 2009 excess pension of £1830 will rise at 2.5% a year.
The 2nd pension is valued at £9757 a year,GMP £1026 & Excess over GMP £8730.(Final pensionable salary of £46,000)+ an AVC fund of £13,000.
At 65 I have 2 options with this pension-either
1.Estimated main plan pension of £16,500 a year + AVC of £13K or
2.estimated reduced main pension plan of £12342 + pension commencement lump sum of £69000 + AVC of £13K.
My GMP is revalued at a fixed rate of £4.5% A YEAR(COMPOUND)between my date of leaving in 2003 and my 65th birthday in 2023.
My excess pension is revalued in line with scheme rules,broadly mirroring inflation up to a maximum of 5% per year.
What would my approximate pensionable value be or how would I calculate it?.
Any advice greatly appreciated.
Regards
Gary.
Wonder whether anyone has a formula for calculating the value of deferred pensions.I appreciate any calculation will be "rough" because we don't know what level of inflation there will be when I retire in 2023.
I have asked a similar question previously,but at that time i was hopeful of returning to work-unfortunately my wife will not be improving to enable me to do this.
I have my state pension which will generate approx £5800 and possibly £7280 when the new plans come into being for flate rate pensions.I have my 30 years NI contributions.
I also have 2 deferred final salary pensions(both closed now).
The first pension is valued at £6600 a year.(Final pensionable salary £54,000).The pre 2009 excess pension of £4770 will rise with inflation to a max of 5% pa until my retirment age. The post 2009 excess pension of £1830 will rise at 2.5% a year.
The 2nd pension is valued at £9757 a year,GMP £1026 & Excess over GMP £8730.(Final pensionable salary of £46,000)+ an AVC fund of £13,000.
At 65 I have 2 options with this pension-either
1.Estimated main plan pension of £16,500 a year + AVC of £13K or
2.estimated reduced main pension plan of £12342 + pension commencement lump sum of £69000 + AVC of £13K.
My GMP is revalued at a fixed rate of £4.5% A YEAR(COMPOUND)between my date of leaving in 2003 and my 65th birthday in 2023.
My excess pension is revalued in line with scheme rules,broadly mirroring inflation up to a maximum of 5% per year.
What would my approximate pensionable value be or how would I calculate it?.
Any advice greatly appreciated.
Regards
Gary.
0
Comments
-
I think - but I stand to be corrected - it's a bit like this:
GMP=GMP at leaving x (1.045)^20
as there's 20 years between leaving the scheme and retiring
Excess over GMP = Excess at leaving * (1+factor/100)
The factor comes from this revaluation table update each year by the government:
http://www.legislation.gov.uk/uksi/2012/2952/article/2/made
So if you left in 2003, you'd use the factor 34.5%
The post excess 2009 will be a similar calculation to the GMP, ie.
Post excess = post excess at leaving x 1.025^(2023-year of leaving)0 -
You have 30 years of NI.
wont' you now need 35 for the new flat rate? I thought it was going up?0 -
Thanks Sandsy and Atush,
Will try the calculations you sent me.Atush, I'm with you, i thought I now had to have 35 years NI contributions,but I was told it was still 30??
Will check with tax office on Monday.
Thanks again.
Gary.0 -
dutchism1958 wrote: »Thanks Sandsy and Atush,
Will try the calculations you sent me.Atush, I'm with you, i thought I now had to have 35 years NI contributions,but I was told it was still 30??
Will check with tax office on Monday.
Thanks again.
Gary.0 -
Thanks Bilbo,
I was born in May 1958 and according to new legislation I can retire in 2024 when i am 66(although I can draw my pensions when I am 65 in 2023).
I think you are right though re the 35 years not enacted yet unfortunately:(
Thanks for replying
Gary.0
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