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Is my pension forecast correct?

2

Comments

  • xylophone
    xylophone Posts: 45,746 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    At the moment I'm mystified-perhaps the website will throw some light.
  • xylophone wrote: »
    At the moment I'm mystified-perhaps the website will throw some light.

    I hope so, I'll have a look tomorrow, do you know of any organisations that could check over the figures for us? We're gutted that we've tried to do the right thing and save hard for a good retirement and the pension is rubbish :(
  • xylophone
    xylophone Posts: 45,746 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I'm wondering whether The Pensions Advisory Service (TPAS) might help?
  • hugheskevi
    hugheskevi Posts: 4,601 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    My guess (and it is that) at what is going on:
    Basic scheme benefits before options: Lump sum £22587.91
    Yearly pension: £8356.54
    Plus Brass benefits

    The capital value of a yearly pension at that age is about x20 the annual pension, ie 20x£8,356.54=£167,130.80

    Add to that the Brass pension of £56756.79 to get a total capital value of £223887.59.
    Basic scheme benefits before options: Lump sum £22587.91
    Yearly pension: £8356.54
    Plus Brass benefits

    Options available at 60:
    reduced lump sum: £56756.80
    yearly pension: £10238.87 (including Brass funds)

    It looks like you can choose to exchange main scheme pension for a lump sum. In this case, it looks like you can take £10238.87 of income, or exchange £1882.33 of pension for a lump sum.

    A lump sum of £22587.91 would be consistent with an exchange rate of 12:1 which is plausible.

    Are you allowed to take Brass benefits in conjunction with main scheme benefits? If so, that explains the Options at 60 bit - it may be saying that if you choose no lump sum from the main scheme, you can instead take the Brass scheme entirely as a lump sum (that also fits, as £56756.80 is about 25% of the total capital value of £223,887.59).

    You can try giving the Pensions Advisory Service a call and they can hopefully help.
  • xylophone wrote: »
    I'm wondering whether The Pensions Advisory Service (TPAS) might help?

    I will try them tomorrow, thanks again
  • hugheskevi wrote: »
    My guess (and it is that) at what is going on:



    The capital value of a yearly pension at that age is about x20 the annual pension, ie 20x£8,356.54=£167,130.80

    Add to that the Brass pension of £56756.79 to get a total capital value of £223887.59.



    It looks like you can choose to exchange main scheme pension for a lump sum. In this case, it looks like you can take £10238.87 of income, or exchange £1882.33 of pension for a lump sum.

    A lump sum of £22587.91 would be consistent with an exchange rate of 12:1 which is plausible.

    Are you allowed to take Brass benefits in conjunction with main scheme benefits? If so, that explains the Options at 60 bit - it may be saying that if you choose no lump sum from the main scheme, you can instead take the Brass scheme entirely as a lump sum (that also fits, as £56756.80 is about 25% of the total capital value of £223,887.59).

    You can try giving the Pensions Advisory Service a call and they can hopefully help.

    Thanks, I sort of understand what you're saying, the Brass benefits are included in the forecast, maybe I'm being too simplistic, but if the Brass funds make up for the entire lump sum, then all we will have from the main fund is a yearly pension of £10238.87
    Which doesn't seem very much after 40 years of contributions and doesn't equate to 2/3 of his final salary ( even if you deduct 1 and a half times state pension) which they have.
    I will definitely try the Pensions advisory service tomorrow.
    Thanks again
  • xylophone
    xylophone Posts: 45,746 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I've been having another go at the figures - 1/60 x28884 x39 =£18774.
    £18774- £8381 (1.5xBSP)=£10393 which is fairly close to £10238?
  • xylophone wrote: »
    I've been having another go at the figures - 1/60 x28884 x39 =£18774.
    £18774- £8381 (1.5xBSP)=£10393 which is fairly close to £10238?

    Looks good to me.
  • Bigmoney2
    Bigmoney2 Posts: 640 Forumite
    lizziemay wrote: »
    Hi, I hope someone can help us, Is there an institution that will look at pension forecasts to check whether the figures add up, My husband is 59 and has paid into a final salary pension and a private pension for 39 years. I understand that the final salary pension should be equal to 1 /60th of his final years salary x the number of years worked. The figures don't seem to add up, they have worked it out on his final salary, but then deducted one and a half times the yearly basic state pension. Is this allowed?
    They have also added in his private pension figures (Brass) and still the yearly pension is less than one third of his final salary.
    We would be really grateful for any advice as we are beginning to panic! :eek:

    The final salary scheme I was a member of took off a deduction for being contracted out of serps.

    So rather than just a straight 1 /60th of his final years salary x the number of years worked, there was a deduction of

    lower earnings level x years service /80

    Then any deduction for going before normal pension age is applied.

    No idea if your pension will be the same or not.

    Also the LEL figure was also averaged over the last 12 months so unless retriring on 5th April would be a bit lower than the current figure.

    Salary may not be the salary at date of retiring, it could also be averaged over say the last 12months, or even 3 years depending on the scheme rules.
  • xylophone wrote: »
    I've been having another go at the figures - 1/60 x28884 x39 =£18774.
    £18774- £8381 (1.5xBSP)=£10393 which is fairly close to £10238?

    I can see that now, it does sound right, unfortunately!
    I will still have a look at both web sites though just in case.
    Thanks again for your help
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