Deferred Pension

MikeJones_2

Hi Pez,

Pez wrote: »

The second way would end up more generous I think.

Not necessarily. It depends upon what early retirement penalty/factor is used.

Pez wrote: »

Another thing I'm struggling with - the Early Retirement factor reduction....

Take care here. The terminology is non-standard and can vary from scheme to scheme. One scheme's early payment penalty may not be the same as another scheme's early payment factor.

Example. If you are quoted an early payment factor of 0.43 at (say) age 50, check to see whether you'd get 43% of your pension or 57% (1 - 0.43). I've seen it used both ways. (Some schemes quote it this way rather than a fixed percentage reduction for each year taken early such as 3% p.a.). Easy to get confused!

Pez wrote: »

...I was told that I would be, in real terms, better off to wait until Normal Retirement Age.

There are so many different methods of calculating early payment that you can't make a statement like that with any degree of reliability.

Hope that helps.

Mike

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.