Calculation of Deferred State Pension

Bazzh

Is my understanding correct, that only the lump sum option attracts annual CPI increases over the deferred period. Taking the 10.4% for each year of deferment does not. In other words, the amount quoted to me, by the DWP 4 years ago, of £123 per week, would be the same today, without the extra pension added.

kidmugsy

Bazzh wrote: »

Is my understanding correct, that only the lump sum option attracts annual CPI increases over the deferred period. Taking the 10.4% for each year of deferment does not. In other words, the amount quoted to me, by the DWP 4 years ago, of £123 per week, would be the same today, without the extra pension added.

No, if you take the extra pension it's based on the pension you would otherwise have been getting at the instant you restart your pension. So the uprating with inflation is automatically included.

mgdavid

for reference it's all in here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210220/DWP024.pdf

JohnB47

But I believe that the single tier pension, due to be introduced for people retiring after April 2016, will have less generous deferred pension rewards.

kidmugsy

JohnB47 wrote: »

But I believe that the single tier pension, due to be introduced for people retiring after April 2016, will have less generous deferred pension rewards.

No wonder: the present deal is very good for the pensioner and therefore very expensive for the taxpayer.

Bazzh

Many thanks for the input guys. I made my pension claim today, with the April 2014 increase I am going to be close to £200 per week. Very happy. Compliments of the season to you all.

Bazzh

Ok my state pension is now sorted. Defined benefit pension also around £10K. I have £175k in cash savings, isas and fixed deposit. I would like to get some extra income if possible, via a low risk portfolio of, bonds, some gilts, a small amount of property and emerging markets.
I have contacted a IFA, regarding investing £50k. He came up with a portfolio of 10 funds. Basically 4% up front and 0.5% per annum. Total growth rates, 1 year 8.23%, 3 years 8.93%, 5 years 13.39%. Are these figures achievable? also are the fees reasonable?

Wilkins

Bazzh wrote: »

Ok my state pension is now sorted. Defined benefit pension also around £10K. I have £175k in cash savings, isas and fixed deposit. I would like to get some extra income if possible, via a low risk portfolio of, bonds, some gilts, a small amount of property and emerging markets.
I have contacted a IFA, regarding investing £50k. He came up with a portfolio of 10 funds. Basically 4% up front and 0.5% per annum. Total growth rates, 1 year 8.23%, 3 years 8.93%, 5 years 13.39%. Are these figures achievable? also are the fees reasonable?

Where do these growth rate figures come from? Nowhere realistic, I suspect. Why don't you just invest the £50k in a selection of low cost funds yourself (maybe ETFs/ITs)? Total cost £100-£200, not £2000 and an ongoing fee.


BTW, why do you think that bonds, property and emerging markets are "low risk"?

Bazzh

This was a illustration given to me by the IFA. Maybe not low risk but a defensive portfolio. I have met with him three times although have not handed over any money, and to be honest, not at all sure if I want to proceed. If I withdraw now, would I still be liable for the fees?

Wilkins

Bazzh wrote: »

This was a illustration given to me by the IFA. Maybe not low risk but a defensive portfolio. I have met with him three times although have not handed over any money, and to be honest, not at all sure if I want to proceed. If I withdraw now, would I still be liable for the fees?

Not for the fees previously indicated I would have thought, but the man is surely entitled to some money for the time he has already taken.

Bazzh

I would be happy to pay him for any work he has done so far. I think the initial consultation should be free. Sorry for my ignorance but what are EFT's/IT's?