Taking deferred pension early

t0rt0ise

I have a deferred SAUL pension. The normal pensionable age with it is 65 but the rules say "Benefits built up before 1 July 2012, (which mine are) are reduced by 3% for each year before age 60 that you retire."

http://www.saul.org.uk/3fsdeferred/retiring.html#early

So why wouldn't I take the pension early rather than waiting until 65? I won't get much because I wasn't there long but any little would be welcome. There must be a catch somewhere but it seems to say that there is no reduction for retiring at age 60. What am I missing?

kidmugsy

Just speculation, but it sounds to me as if that scheme may have changed its normal retirement age, letting you take advantage of the previous one i.e. age 60.

It might be wise to consider whether you'd be better off taking no lump sum so that you get maximum pension. That will depend on many things including your health, whether you're from a long-lived family, whether you have expensive debts, whether taking a bigger pension also increases your eventual widow's pension …..

You might even consider drawing the pension before age 60 if, say, you are in poor health. The penalty of 3% p.a. is smaller than the common 5%-6% penalty.