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  • FIRST POST
    • thebullsback
    • By thebullsback 18th Mar 17, 4:36 PM
    • 336Posts
    • 30Thanks
    thebullsback
    Previous Employment Final Salery
    • #1
    • 18th Mar 17, 4:36 PM
    Previous Employment Final Salery 18th Mar 17 at 4:36 PM
    Hi all.I asked a couple of questions about this pension last year and decided to just sit on it and leave it.
    I have this year asked for a new "retire now" forecast,I am 58 and my normal retirement date is not til February2024.
    Last year I was offered-
    Option one-965.40 p/a
    option two 963.12 plus 41.28p lump sum
    Transfer value 26208.00
    Transfer value of GMP inc. in above 13378.99

    Last week I received this offer if I take the plan now.
    option one 1111.56 p/a
    option two 989.16p/a plus lump sum of 2106.39
    Transfer value 30046.27
    I have also been told I could move to another insurance company OR cash the Transfer value in and receive 7.511.57 tax free out of the 30046.27 pot.

    First question is if I leave it another year will my pot increase by about another 4000 ??
    Second question is why such a big difference between lump sums last year and this year??
    Thank you for reading.
Page 1
    • latest flame
    • By latest flame 18th Mar 17, 5:54 PM
    • 856 Posts
    • 1,642 Thanks
    latest flame
    • #2
    • 18th Mar 17, 5:54 PM
    • #2
    • 18th Mar 17, 5:54 PM
    Hi all.I asked a couple of questions about this pension last year and decided to just sit on it and leave it.
    I have this year asked for a new "retire now" forecast,I am 58 and my normal retirement date is not til February2024.
    Last year I was offered-
    Option one-965.40 p/a
    option two 963.12 plus 41.28p lump sum
    Transfer value 26208.00
    Transfer value of GMP inc. in above 13378.99

    Last week I received this offer if I take the plan now.
    option one 1111.56 p/a
    option two 989.16p/a plus lump sum of 2106.39
    Transfer value 30046.27
    I have also been told I could move to another insurance company OR cash the Transfer value in and receive 7.511.57 tax free out of the 30046.27 pot.

    First question is if I leave it another year will my pot increase by about another 4000 ??
    Second question is why such a big difference between lump sums last year and this year??
    Thank you for reading.
    Originally posted by thebullsback
    1. No one knows, for what its worth I think it will decrease.
    2. Because of the variable factors the actuaries decided to use.
    • Bazofts Revenge
    • By Bazofts Revenge 19th Mar 17, 4:50 PM
    • 262 Posts
    • 131 Thanks
    Bazofts Revenge
    • #3
    • 19th Mar 17, 4:50 PM
    • #3
    • 19th Mar 17, 4:50 PM
    Lasts years lump sum equated to 18.10 for every pound you could give up.

    This year they have offered you 17.21 for every pound you could give up.
    Solar PV cost 5760 (15/03/13)
    FIT inc + Electricity saved 3387 (59% Paid back) Tax free
    Last update 20/05/17
    • thebullsback
    • By thebullsback 19th Mar 17, 5:45 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    • #4
    • 19th Mar 17, 5:45 PM
    • #4
    • 19th Mar 17, 5:45 PM
    Any thoughts on next years pot size,more in or lower and what is it dependent on ?
    • Bazofts Revenge
    • By Bazofts Revenge 19th Mar 17, 7:53 PM
    • 262 Posts
    • 131 Thanks
    Bazofts Revenge
    • #5
    • 19th Mar 17, 7:53 PM
    • #5
    • 19th Mar 17, 7:53 PM
    Any thoughts on next years pot size,more in or lower and what is it dependent on ?
    Originally posted by thebullsback
    Looking at the difference between the 2 years you quoted there was a difference of 15%, This would consist of the annual nominal rise to keep up with inflation and a reduction in the factor they have used to penalise you for going early.

    Do you know what the Actuarial Reduction factors are for your scheme? Mine is about 5% a year and your quotes may have crept in 2 Birthdays if you didn't get them exactly 12 months apart.

    65 0% reduction
    64 5% reduction
    63 10% reduction
    62 15% reduction
    61 20% reduction
    60 25% reduction
    59 30% reduction
    58 35% reduction

    Bear in mind some schemes do not allow transfers out after 64 years of age.
    Solar PV cost 5760 (15/03/13)
    FIT inc + Electricity saved 3387 (59% Paid back) Tax free
    Last update 20/05/17
    • thebullsback
    • By thebullsback 19th Mar 17, 9:04 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    • #6
    • 19th Mar 17, 9:04 PM
    • #6
    • 19th Mar 17, 9:04 PM
    so does it follow like night follows day that if i leave my pot alone till im 60 it will be higher??
    • latest flame
    • By latest flame 19th Mar 17, 11:08 PM
    • 856 Posts
    • 1,642 Thanks
    latest flame
    • #7
    • 19th Mar 17, 11:08 PM
    • #7
    • 19th Mar 17, 11:08 PM
    so does it follow like night follows day that if i leave my pot alone till im 60 it will be higher??
    Originally posted by thebullsback
    Definitely not.
    • thebullsback
    • By thebullsback 20th Mar 17, 1:40 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    • #8
    • 20th Mar 17, 1:40 PM
    • #8
    • 20th Mar 17, 1:40 PM
    any reasons to suggest I don't just cash in the lot now then as the thought of 1111 p/a don't seem good from the pot size
    • mgdavid
    • By mgdavid 20th Mar 17, 5:21 PM
    • 5,158 Posts
    • 4,328 Thanks
    mgdavid
    • #9
    • 20th Mar 17, 5:21 PM
    • #9
    • 20th Mar 17, 5:21 PM
    Firstly you don't have a pot, this is a Defined Beneifit pension where they guarantee to pay you the annual amount, index-linked, for the rest of your life (even if you live to be 100 or more). Unless you have some health issues you have a 50% chance of reaching close to 90.
    You haven't answered the previous question about the amount of actuarial reduction per year for taking it before your normal retirement age - this matters. If it's 5% then actually you will be getting 1700 per year at age 65.
    The transfer value (CETV) is the amount they will pay to absolve themselves of the responsibility of paying that annual pension for life, i.e. to get rid of you!
    If you have no other pensions apart from State Pension then that 1700-odd every year will make quite a difference.
    By the way, as the CETV is now (just) over 30k then you will need to take advice from an IFA which costs, could be 1000 or more.
    A salary slave no more.....
    • thebullsback
    • By thebullsback 20th Mar 17, 7:24 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    thank you for your helpful replys everyone.
    Tomorrow i will find out the actuarial reduction per year is there anything else i should ask??
    • xylophone
    • By xylophone 20th Mar 17, 8:25 PM
    • 21,335 Posts
    • 12,257 Thanks
    xylophone
    If you have no other pensions
    http://forums.moneysavingexpert.com/showthread.php?p=70314706#post70314706


    I have a works pension,a Bond 32 and 4 other pensions all of which I would like advice on.

    The "works pension" is NHS DB.

    I assume the pension under discussion is this one - post 96?

    http://forums.moneysavingexpert.com/showthread.php?t=5245197&page=5
    • thebullsback
    • By thebullsback 20th Mar 17, 8:45 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    xyolophone it is not the pensions mentioned in those previous threads.
    I only became aware of this pension under discussion now in January of 2016.
    • hennerz
    • By hennerz 20th Mar 17, 11:59 PM
    • 171 Posts
    • 32 Thanks
    hennerz
    Is it possible to take 10% lump sum from a DB pension? Or is it always 25%? I've seen "maximum of 25%" written, but not sure if it possible to ask for less, like in a DC pension?
    • xylophone
    • By xylophone 21st Mar 17, 12:04 AM
    • 21,335 Posts
    • 12,257 Thanks
    xylophone
    Is it possible to take 10% lump sum from a DB pension? Or is it always 25%? I've seen "maximum of 25%" written, but not sure if it possible to ask for less, like in a DC pension?
    In some DB pension schemes, the lump sum is available through commutation of part of the scheme pension up to 25%.
    • hennerz
    • By hennerz 21st Mar 17, 12:12 AM
    • 171 Posts
    • 32 Thanks
    hennerz
    In some DB pension schemes, the lump sum is available through commutation of part of the scheme pension up to 25%.
    Originally posted by xylophone
    Sure - on the db pension I'm thinking about the statement shows a lump sum option. It doesn't explicitly say 25%, I am wondering, is it definitely 25% they are offering? And is there an option to take a smaller lump sum?
    • thebullsback
    • By thebullsback 21st Mar 17, 6:57 PM
    • 336 Posts
    • 30 Thanks
    thebullsback
    Actuarial Reduction is 4% p/a .
    to help further a little about myself .
    It has always been my intention IF possible to finish work at 60.I am a simple soul with simple pleasures and no great financial demands or wants such as exotic holidays ,fast cars,fast women and or a weakness for designer clothes.
    I have worked since 1975 and always paid into any works pension available and in some cases even paid into AVC s as well as opting out of serps as soon as I could legally.
    My wife works and intends to keep working for at least the next 5 years .we are both employed by the NHS so have decent pensions.
    At 60 my NHS pension gives me around 7000 p/a plus a lump sum off 22000.At 62 another pension I have kicks in at a GMP of 2000 ish p/a i also have three other pensions that I have discussed on here last year that I reckon will provide about 1000 p/a at 65.
    My wife and I have savings as well as an inheritance and feel that putting as much of this pot into savings would be more beneficial to us than receiving a yearly sum from a pension provider.
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