partial retirement for civil servants?

simpleservant

hi all - i am a civil servant of a certain age who is considering partial retirement, wondered if anybody had any thoughts or knowledge about it, i',m hearing good things about working less and not losing much money, but am also hearing that i will lose out eventually when i do reach retirement age! am very confused, appreciate any help!:beer:

xylophone

http://www.civilservice.gov.uk/wp-content/uploads/2011/09/Partial_retirement_QA_tcm6-2024.pdf

NAR

Simpleservant, here is the link to the Partial Retirement booklet.
http://www.civilservice.gov.uk/wp-content/uploads/2011/09/PR1_tcm6-1878.pdf
Sorry I couldn't find it earlier.

BobQ

My neighbour does this and is having a wonderful time. He works Tues, Wed and Thurs morning and earns 50% of of his previous salary while drawing half pay index linked pension. He told me his income for working 18 hours a week was 85% of his previous pay and he is still buying more pension.

You should seek advice on the matter form a pensions expert, but I'm not sure why you would be told you "lose out" in the long term. The biggest benefit is not having to work as much and free time to do as you please.

Obviously with PR you get less income than if you stayed at work full time but you are working less hours so expect less income and you expect to earn less final pension than if you completed more full years . Obviously if you cannot afford any drop in income it would be a mistake, but if you are comfortably off (say you have earned a half pay pension already) its often a very good deal.

If you keep working full time, a few years of low or no pay rises will reduce the value of the pension you would have drawn. PR means your pension increases with inflation even if your part time pay does not. Obviously if you think that by carrying on working for say 5 years you will enjoy above inflation salary increases you may indeed be disadvantaged by it! Also remember that the part time employment will earn you more pension.

It depends on what your boss will let you do. If you keep your previous grade and just have to reduce your hours it probably works fine. If you are asked to do a less responsible job and so get a lower salary for working 30 hours a week it will be less advantageous.

As PR at the employer's discretion whether you do it, do not put it off if it looks attractive, because they may withdraw it as part of the pension reforms.

simpleservant

Bobq I received loads of responses to my query and was surprised at the negativity, i thought it was a forum where we all helped each other out. Thank you very much for your reply, i will further investigate.:j

atush

I don't think pointing out to you that there are possible risks and downsides is negative esp considering the first paragraph. I think it is always wise to assess risk.

Andy_L

If you take your pension early it is reduced (very approximatly by 5%/year early) and is based on the final salary then, ignoring any pay increases during your partial retirement

During the years of partial retiremnt you build up less pension as its effectively a new pension based on the reduced salary

BobQ

simpleservant wrote: »

Bobq I received loads of responses to my query and was surprised at the negativity, i thought it was a forum where we all helped each other out. Thank you very much for your reply, i will further investigate.:j

You do need to investigate. Partial Retirement is a concept that means different things to different people because its attractiveness depends on your circumstances and what they offer you.

The chap I mentioned in the previous post was approaching 59 when he took PR last year, earning about £47K and had been in Classic for 39 years meaning that at 60 he would have got a pension of half pay. He was offered a reduction in workload doing the same job. Under PR he is working less but has the same standard of living. His original pension was 5% less than it would have been at 60 but this was revalued by inflation of about 5% this year at a time of a pay freeze.

As I understand it, someone who in Classic and say 55 would be in a very different situation as his pension would be reduced by about 25%. Also if the reduction in pay for PR were achieved by taking a lower paid job and working say 30 hours he would be losing a lot more and only getting a day off each week.

To say if its right for you is difficult without knowing how many years of pension you have acrued, how many years till pension age, and what you are being offerred as a working pattern. Even then it depends on how well off you are and how much free time you would like to enjoy.