pension question

vsoe57

hi I have a railway pension that I have been paying into for almost 40 years I have a choice at 40 years to stop paying into the pension with no loss of rights but can my employer reduce my pension by 10% each year If I leave before the age of 60 I am now 56 if I have paid max contributions any help please thank you

kidmugsy

vsoe57 wrote: »

hi I have a railway pension that I have been paying into for almost 40 years I have a choice at 40 years to stop paying into the pension with no loss of rights but can my employer reduce my pension by 10% each year If I leave before the age of 60 I am now 56 if I have paid max contributions any help please thank you

10% seems heavy; with many pensions it might be around 6%. The detail depends on the terms of your particular pension fund, but if you retire early so that you draw the pension for more years, do you really think it right that your former colleagues subsidise you? If everyone did it, who would subsidise them?

vsoe57

But the point is I will have paid max funds into the pension

p00hsticks

vsoe57 wrote: »

But the point is I will have paid max funds into the pension

no, I think the point is that the earlier you start claiming your pension, the longer (on average) you will be drawing it and therefore the more it will have to pay out.

so, for example - person A and B both pay into the pension for 40 years from age 16 - 56.

Person A starts drawing their pension straight away at the age of 56 until they die - say thirty years later, at the age of 86.

Person B waits until they are age 60 to claim theirs, and also dies at the age of 86, so has only been receiving their pension for 26 years.

Both have paid in the same - if both are to receive the same out, then person A's pension amount must be reduced to cater for the fact that they are claiming it for longer.

sleepless_saver

vsoe57 wrote: »

hi I have a railway pension that I have been paying into for almost 40 years I have a choice at 40 years to stop paying into the pension with no loss of rights but can my employer reduce my pension by 10% each year If I leave before the age of 60 I am now 56 if I have paid max contributions any help please thank you

You could phone up the pension scheme administrators and ask them.

atush

Or, here's an idea. Dpon't take the pension early.


If you want to retire early, and aren't paying contribs any longer, pay that money into a PP or a S&S isa (or both) and retire early using that money.


Leaving the FS pension to be taken at age 60?

vsoe57

ok thanks was not going to take pension early just checking out the situation with the reduction each year before 60 it was just a question of where I stood

Freecall

atush wrote: »

pay that money into a PP or a S&S isa (or both) and retire early using that money.

The OP is a railway worker so he should probably use a platform for this.

:rotfl::rotfl::rotfl:

dunstonh

Freecall wrote: »

The OP is a railway worker so he should probably use a platform for this.

:rotfl::rotfl::rotfl:

You are going off the rails with some of your recent posts.

atush

Sometimes we need a bit of humor round here to lighten things.

kidmugsy

atush wrote: »

Sometimes we need a bit of humor round here to lighten things.

Is that you signalling your approval?