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  • mania112
    • #2
    • 6th Jan 13, 10:53 AM
    • #2
    • 6th Jan 13, 10:53 AM
    Am I right in thinking you have a Royal Mail pension?

    Here's their comments on early retirement:

    The current early retirement reduction is around 5% a year; this is a matter for Trustee and is reviewed from time to time by the Plan Actuary. Therefore, it is not possible for an individual to reduce the standard reduction factor since it is considered fair to reduce a pension paid early to compensate for the fact that it will be paid for longer. One way to offset the effect of the reduction is to pay Additional Voluntary Contributions to build up extra pension to cushion the effect of the early retirement reduction. Please note that if you retire at age 60, it is only the pension earned after April 2010 pension that will be reduced.
    The only way to be sure what you'll get is to ask them for a retirement quote at age 55.

    It's better, obviously, to hold on.
  • mangrego
    • #3
    • 6th Jan 13, 11:01 AM
    • #3
    • 6th Jan 13, 11:01 AM
    Hi

    Mannia


    Yes thats right but i took ill health retirement 3 years ago at the age of 48 so i dont work there anymore and that was the illistration they sent me so was wondering how much i would get on that figure.

    regards
  • Money Doctor
    • #4
    • 6th Jan 13, 11:59 AM
    • #4
    • 6th Jan 13, 11:59 AM
    you should check if any reduction factor applies in the event of ill-health, the pension administrators should be aware of the situation,
    a quick phone call stating ill health and that you are considering drawing the pension know will see the relevant forms sent to you
  • mangrego
    • #5
    • 6th Jan 13, 12:17 PM
    • #5
    • 6th Jan 13, 12:17 PM
    Hi Money doctor

    I think i still lose 25 % as i will be taking it 5 years early

    regards
  • mangrego
    • #6
    • 8th Jan 13, 9:01 AM
    • #6
    • 8th Jan 13, 9:01 AM
    Thoughts please

    I did telephone my pension office and was told although i was ill health retired i would if i too my pension at 55 lose 25% of it.
    Ok i know most people say not to take the pension early at 55 instead of 60 but a scenario here, My pension at 55 will be about 8-9,000 a year and about 12,000 at 60 but if i am not working and i take the pension at 55 surely if the worse happened and i died early at least i will have had my pension paid to me say if i die at 65 i would have had 10 years pension.

    I know this sounds dramatic but i know of many people that have worked for -------- got to retirement age then died shortly after that so this is my thoughts. Ok i live very long after taking my pension at 55 i will have had 45,000 in payments before i reach 60 then i will get my state pension at 66 so that including my works pension will be enough to live on as i am currently living abroad and intend to stay abroad.

    thoughts please

    regards

  • mania112
    • #7
    • 8th Jan 13, 9:28 AM
    • #7
    • 8th Jan 13, 9:28 AM
    Thoughts please

    I did telephone my pension office and was told although i was ill health retired i would if i too my pension at 55 lose 25% of it.
    Ok i know most people say not to take the pension early at 55 instead of 60 but a scenario here, My pension at 55 will be about 8-9,000 a year and about 12,000 at 60 but if i am not working and i take the pension at 55 surely if the worse happened and i died early at least i will have had my pension paid to me say if i die at 65 i would have had 10 years pension.

    I know this sounds dramatic but i know of many people that have worked for -------- got to retirement age then died shortly after that so this is my thoughts. Ok i live very long after taking my pension at 55 i will have had 45,000 in payments before i reach 60 then i will get my state pension at 66 so that including my works pension will be enough to live on as i am currently living abroad and intend to stay abroad.

    thoughts please

    regards

    Originally posted by mangrego
    If you can afford to live on 9k pa @ 55, that's fine.

    If it's not enough, then you should wait until more is available @ age 60.

    Second consideration is death benefits, your surviving spouse will be getting (probably) 50% of your pension when you die. So clearly she will get half of a lesser amount if you take benefits at age 55.

    If you understand that, and are happy to do it - then you should. It's your retirement and your money.
  • mangrego
    • #8
    • 8th Jan 13, 9:43 AM
    • #8
    • 8th Jan 13, 9:43 AM
    If you can afford to live on 9k pa @ 55, that's fine.

    If it's not enough, then you should wait until more is available @ age 60.

    Second consideration is death benefits, your surviving spouse will be getting (probably) 50% of your pension when you die. So clearly she will get half of a lesser amount if you take benefits at age 55.

    If you understand that, and are happy to do it - then you should. It's your retirement and your money.
    Originally posted by mania112
    Hi Mania

    Thanks for your reply i am single so i am asumming i will lose the pension if i die

    regards
  • mark88man
    • #9
    • 8th Jan 13, 10:57 AM
    • #9
    • 8th Jan 13, 10:57 AM
    I am not sure if your ill health means you will become progressively less able to do stuff you enjoy, or even if it means you may die earlier, but my rough calculations (9k at 55 vs 12k at 60) inidicate that it would take until 75 (ie 15 years after 60) to catch up. [I haven't considered inflation increases but that would only make 1-2 years at most]

    So when you are 75 the general concensus is that you will be spending less than you are now - so if you feel you can survive on 9k now you should be more than all right later especially as you will have state pension from your state retirement age 65/66/...)

    I don't know what other benefits you might be getting (or even that you might be losing if you receive this income). That's part of the bigger calculation

    EDIT - One other point you have a sizeable lump sum there - if you split that between the 10 years between now and 65 that would double you effective income - and maybe let you do more fun stuff while you are relatively fitter. Its a difficult choice between how much of the lump sum to spend vs how much to save (ie how quickly to run it down) - but plenty of options for getting income from it
    Last edited by mark88man; 08-01-2013 at 11:01 AM. Reason: added final paragraph
    Man is selfish not when he pursues his own good, but when he neglects his neighbour's.
    Weight 02/2015 - 125.7 Kg : Weight 06/2015 - 118.2Kg : Target 1 - Under 100Kg by 12/2015
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  • mania112
    Thanks for your reply i am single so i am asumming i will lose the pension if i die
    Originally posted by mangrego
    Unfortunately you WILL die... one day

    Yeah, in a final salary plan - the pension dies with you if you're single.

    If part of the pension is AVC or some other 'money purchase' type, this will be paid into your estate, so your family will be able to receive some, I'm not sure if that applies to you.
  • mangrego
    I am not sure if your ill health means you will become progressively less able to do stuff you enjoy, or even if it means you may die earlier, but my rough calculations (9k at 55 vs 12k at 60) inidicate that it would take until 75 (ie 15 years after 60) to catch up. [I haven't considered inflation increases but that would only make 1-2 years at most]

    So when you are 75 the general concensus is that you will be spending less than you are now - so if you feel you can survive on 9k now you should be more than all right later especially as you will have state pension from your state retirement age 65/66/...)

    I don't know what other benefits you might be getting (or even that you might be losing if you receive this income). That's part of the bigger calculation

    EDIT - One other point you have a sizeable lump sum there - if you split that between the 10 years between now and 65 that would double you effective income - and maybe let you do more fun stuff while you are relatively fitter. Its a difficult choice between how much of the lump sum to spend vs how much to save (ie how quickly to run it down) - but plenty of options for getting income from it
    Originally posted by mark88man
    Hi Mark

    Thanks for your reply I am not ill i took ill health retirement from a stressfull job with stress and i currently live abroad so as long as i am aware i am healthy, I am not sure what my lump sum would be yet and wont know how much i will lose from my pension if i take it, all i know at present at 60 my pension will be about 12K at 55 about 9K. If i stay living abroad i will be able to live on 9K If i take a lump sum i will invest it and wont need to spend it though not sure how much it will go down from the 9K. Then at 66 i will have my state pension, will i pay tax on any of the pensions? as my allowance will be higher than the 8K ish now. My logic is if anything did happen to me in my 60's o 70's i would have at least had 5 yrs pension payments from 55? instead of waiting until i am 60. My reason for thinking like this is my mother retired at 65 and then was told she had incurable cancer and died at 70 so i said i was going to retire early in life at least if the worse happened i would have at least had some retirement. Bleak thinking i know but this is the worse scenario.

    regards
  • mark88man
    Good luck with your plan - I don't disagree if you can afford to live on 9K.

    You will pay tax on pension income if you are over the limit 10k or so, and it seems you will be in that zone, but not by much.

    I am not sure if you are non resident or not and that will effect your tax and what you can do with ISAs (you should ask), so your investment income may also be taxable but even so not a large %age of it

    You may also need to check exactly how much UK pension you get if you have been abroad - you need an expert for that

    For me the worst case scenario booklet has 2 cases
    * that you die with money unspent
    * that you survive but have spent the money (and may be in an unsympathetic foreign country!!)
    Man is selfish not when he pursues his own good, but when he neglects his neighbour's.
    Weight 02/2015 - 125.7 Kg : Weight 06/2015 - 118.2Kg : Target 1 - Under 100Kg by 12/2015
    LBM 7/2007 - 21,870 Debt@18% - 191K Mortgage@5.5% - 0 Savings
    NOW 6/2015 - 5.4K CC Debt@0% - 18K HP (Cars) - 172K Mortgage@2.9% (inc 50k extension) - 3k savings
  • kevelesopnic
    Hi Mark

    Thanks for your reply I am not ill i took ill health retirement from a stressfull job with stress and i currently live abroad so as long as i am aware i am healthy, I am not sure what my lump sum would be yet and wont know how much i will lose from my pension if i take it, all i know at present at 60 my pension will be about 12K at 55 about 9K. If i stay living abroad i will be able to live on 9K If i take a lump sum i will invest it and wont need to spend it though not sure how much it will go down from the 9K. Then at 66 i will have my state pension, will i pay tax on any of the pensions? as my allowance will be higher than the 8K ish now. My logic is if anything did happen to me in my 60's o 70's i would have at least had 5 yrs pension payments from 55? instead of waiting until i am 60. My reason for thinking like this is my mother retired at 65 and then was told she had incurable cancer and died at 70 so i said i was going to retire early in life at least if the worse happened i would have at least had some retirement. Bleak thinking i know but this is the worse scenario.

    regards
    Originally posted by mangrego
    How did you manage to do this?. I'm not taking the P, genuine question.
  • dasherman
    Mangrego, I work for Royal Mail and it seems to me that you're not reading your yearly illustration properly.
    Your benefits at 60 assume you will work for RM until you're 60. Similarly your benefits at 65 assume you will work until 65.
    So if you took ill health retirement 3 years ago at aged 48, the figures shown on your statement are null and void.

    In addition to that, the career average pension(CSDB) only came into force in 2008, so presumably you only paid into it for about 2 years, so it's highly unlikely that you'll have a built up 4,510 worth of pension in such a short time.
    Every little bit counts.
  • mark88man
    Dasherman - in the LGPS (Local Govt) which I know more about than royal mail - if you get given ill health retirement your pension is normally made up until your normal retirement date so the forecast may be right.

    LGPS has 3 tiers - never going to work at anything again, never going to do your precise job again, and the third is something to do with 3 years

    If there is any doubt though, Mangrego you need to double check as my (private company) pension statements were done on exactly the basis that dasherman suggests - ie assuming I worked until normal retirement age
    Man is selfish not when he pursues his own good, but when he neglects his neighbour's.
    Weight 02/2015 - 125.7 Kg : Weight 06/2015 - 118.2Kg : Target 1 - Under 100Kg by 12/2015
    LBM 7/2007 - 21,870 Debt@18% - 191K Mortgage@5.5% - 0 Savings
    NOW 6/2015 - 5.4K CC Debt@0% - 18K HP (Cars) - 172K Mortgage@2.9% (inc 50k extension) - 3k savings
  • mangrego
    Mangrego, I work for Royal Mail and it seems to me that you're not reading your yearly illustration properly.
    Your benefits at 60 assume you will work for RM until you're 60. Similarly your benefits at 65 assume you will work until 65.
    So if you took ill health retirement 3 years ago at aged 48, the figures shown on your statement are null and void.

    In addition to that, the career average pension(CSDB) only came into force in 2008, so presumably you only paid into it for about 2 years, so it's highly unlikely that you'll have a built up 4,510 worth of pension in such a short time.
    Originally posted by dasherman
    Hi Daserman

    I am reading my illistraton right i telephoned Pensions the other day and they stated this is the figure my pension is worth at the moment!!

    I was a Manager for Royal Mail and was ill health retired on the terms that i was unable to do that job again.

    I get a yearly statement as to what my pension is worth as of today and i had an indepth conversation on Tuesday with pensions and the figures are correct i worked for Royal Mail for 21 years.
    regards
  • dasherman
    Hi Daserman

    I am reading my illistraton right i telephoned Pensions the other day and they stated this is the figure my pension is worth at the moment!!

    I was a Manager for Royal Mail and was ill health retired on the terms that i was unable to do that job again.

    I get a yearly statement as to what my pension is worth as of today and i had an indepth conversation on Tuesday with pensions and the figures are correct i worked for Royal Mail for 21 years.
    regards
    Originally posted by mangrego
    Ok. Fair enough.
    Every little bit counts.
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