Occupational pension query.

Gareth56

When I left work I had accured an OP of about £6K per annum or £115 per week which I can take at 50 yrs old. What I'm not sure about is, is that if I take my OP at 50 will I get £115 per week (not counting any rises etc due to inflation etc) for the rest of my life?

EdInvestor

Probably, but ask the pensions department of the company.

Debt_Free_Chick

Pension entitlements are usually quoted as the amount payable at normal retirement age. There may be increases to add on to that amount (partial inflation proofing) and then a reduction for early retirement. As Ed suggests, get an estimate from the administrators.

Bear in mind too that after April 2010 you can't receive pension until you're at least age 55.

Gareth56

So what do they mean when the say "you still have the right to take an early retirement pension from age 50. You could also take part of that pension as cash and receive a smaller pension payment"?

As far as I can see the £6K is payable at 'normal' retirement date so what is an 'early retirement pension'? Are they the same?

Thanks

jonathon_hart

Depending on the rules of the scheme you may get the £6k reduced by a percentage for taking it earlier

When they say you could take part of the pension as a lump sum what they mean is that you could take a pension of £6k you could voluntarily give up some of the £6k and replace it with a tax free cash lump sum.

The option to take cash and a reduced pension is entirely separate to what would be a forced reduction in your pension for taking early retirement.

CLAPTON

Normally there is a retirement age often 60 years old and you have the option of taking the pension or cash plus a reduced pension.

Many pensions schmemes allow you to retire early i.e. after 50 years old (although that changes to 55 in april 2010).
However there is usually an acturial reduction in the pension amount to cover the costs of the extra 10 years of pension you receive. Again you will be offered the option of taking the (reduced ) pension or an even more reduced pension and cash.

You need to get quotes from your pension administrators for all four options

Debt_Free_Chick

Gareth56 wrote: »

So what do they mean when the say "you still have the right to take an early retirement pension from age 50.

Just that

Your pension will be paid at the scheme's normal retirement age, but you have the option to take "an early retirement pension" i.e. a pension paid earlier than the normal age.

What you get depends on the rules of the scheme.

BUT ... the Government have moved the goalposts so that, after April 2010, you must be age 55 or over in order to receive your pension.

MikeJones_2

Hi Gareth56,

This free factsheet might help you consider some of the important issues such as:

Can I retire early?
Do I need consent?
What if I am refused an early retirement?
At what age can early payment begin?
Will I be penalised if I am granted early payment?
Penalties, Discount Rates & Reduction Factors
Can my pension scheme withdraw the option of early payment?
Waiting a short while could improve your pension
Pension increases once your pension commences
Step-up pensions, Bridging Pensions, Pension Deductions and Offsets
Pension Protection Fund issues

Early Payment of Pension Benefits for Preserved Members of Defined Benefit Schemes

Hope this helps.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.