BT Pension early retirement

Greory23961

I Have just turned 50 and can now claim my BT pension at at reduced amount. Should I take the lump sum and pension in order to pay off my mortgage? If I do this I feel I could pay the mortgage off in around 1 year rather than the 10 years remaining.

I Left BT In 1994 after 14 years and 4 months service so my pension would be fairly small. If i were to pay off my mortgage in a year or so I could then invest the pension and the money I'd save through not paying a mortgage. Maybe £600 - £700 a month.

ExBT_Bob

Think carefully! It's a huge permanent reduction to your pension:

If you're in BTPS Section B:

Benefits built up before 1st April 2009...

Age 50 - 44% reduction

Benefits built up from 1st April 2009...

Age 50 - 59% reduction

Then obviously the lump sum is 3 times the 2 x reduced amounts added together.

(See BTPensions.net)

atush

Yikes, that is a huge reduction. Can't say I would personally do it.

traineepensioner

Don't forget that you have to leave BT in order to take your pension at 50.....not the easiest time to get another job

Why not hang on until 55, then you can have your pension & continue to work for them...soon pay your Mortgage off

Good luck whatever you decide.

atush

you may be a trainee, but that is good advice ;-)

fiesta04

"I Left BT In 1994 after 14 years and 4 months service"

So advice in #4 irrelevant.

Personally I would not take it.

xmen9990

Hi ,

I can claim my pension and lump sum next year.
I left BT in 1994 (15 years service) and currently I have a pension of 6000 a year and a lump sum of 15,000 . I reach 50 in January 2013. I know if I take it 10 years early then roughly 50% reduction(so 3000 pension).
What I was wondering is does anyone have any idea how much more pension i'd get if I put all my 14,000 lump sum in.

Any help greatly appreciated.

Steve

atush

Call and ask. You are still a mamber of the scheme and they will tellyou the commutation rate and tell you the projection pension.

But I would not take it at a 50% reduction. Silly really.

traineepensioner

Hi xmen9990,

When I enquired (age 53) I was told that the commutation rate was 20 to 1. .... I get £50 per year for every £1000 lump sum that I give up. However, going the other way, I only get 17.5 to 1 exchanging pension for lump sum:( weird init.

P.S. fiesta04 ....The OP hadn't initially included the information that he had left the company:o