is it best to take a deferred pension early

RichandJ

Alter_ego wrote: »

I read post 3 as saying the government are thinking of taxing the 25% lump sum. In light of that I pointed out that they were not thinking of stopping the ability to draw 25%. Just of taxing it.
Let's not get mired any further.

2nd that. Especially on a resurrected thread.

I know what I meant, you know what you meant, lets call the whole thing off

ExBT_Bob

The problem now is that like many others, you have made a decision based on your understanding that your pension would increase annually in line with RPI, and BT have made the decision to adopt CPI! Nice move BT on previously accrued benefits!!

snowstorm10

Is anyone knowledgable on how the actuarial reduction works, do you have to wait for each birthday to move up to the next lower reduction rate, or is it simply applied to the date you leave.

I see BT have increased the actuarial reduction rates in july2011, wasnt aware of this ! Is there any chance that they could stop the option of taking an actuarily reduced pension ???

Thanks

Zelazny

snowstorm10 wrote: »

Is anyone knowledgable on how the actuarial reduction works, do you have to wait for each birthday to move up to the next lower reduction rate, or is it simply applied to the date you leave.

I see BT have increased the actuarial reduction rates in july2011, wasnt aware of this ! Is there any chance that they could stop the option of taking an actuarily reduced pension ???

Thanks

It depends on the scheme rules, but most will pro rata it by months. E.g. if you take the benefits 5 years early, it's 25%. If you take benefits 4 years early, it's 20%. If you take benefits at 4 years and 2 months, it's (20+5*2/12=) 20.8333%

Whether the months are rounded up or down depends on the scheme (and some use 5% compound per year early, meaning that 5 years early is actually 27.63% reduction).

Your best bet to find out for sure is probably to ask the administrators.