Does a Defined Benefit Pension increase if you do not take it at NRD?

kemmyjoe

Hi folks
I was not going to take my deferred DB pension at NRD 60 as I intend to work for a further 2/3 years (different employer). For some reason I thought that the deferred pension will be increasing each year until I decide to take it, but reading through a post on here I am not sure now. Is it better to take the taxed pension and save it, or will it increase if I leave it for 2 more years?

I also have a S32 which I was going to put off taking. Should I take this too.

My aim is to 'earn' the maximum pension as I can when I do retire (no PCLS).

Thank you.

xylophone

https://www.moneyadviceservice.org.uk/en/articles/decide-when-to-take-your-pension

"The effect of deferring a workplace defined-benefit (salary-related) pension depends on the specific scheme’s terms. Check with the scheme administrator or trustees to find out if delaying its start would bring you an increase in your retirement income. If not, bear in mind that you can start the pension but, instead of spending it, you could save or invest it until you need it later."

Check with your S32 provider how and when you can take your benefits, particularly if there is a GMP.(GMP age for women is still 60 and for men 65.)

http://www.scottishlife.co.uk/scotlife/Web/Site/faq2.asp?category=S32%20buyout%20bonds might be worth a look.

kemmyjoe

Hi all
I've had an answer re my S32.
"When we defer the benefits the annuity (pension amount) is increased. The amount it is increased depends on annuity rates at time the annuity is being deferred ie the NRD...... Currently if someone defers from age 60 to 62 the annuity would increase by apx 6% pa the the fund value would increase by apx 3.9% pa. If it was deferred to age 65 the annuity would increase by apx 6.3% pa and the fund value would increase by apx 4% pa. -- figures based on a level annuity and our current annuity rates, and as such future increases in annuity and fund values are not guaranteed"
My guaranteed pension is £2559 (3% increase pa) and if I took it now I would have apx £4k saved in the bank in 2 years time. If I defer for 2 years then I reckon the pension would start at apx £2800. Can anyone tell me what is the better option and why? I don't want any LS. It seems to me that even taking the pension now it will not be far off £2800 in 2 years time. I can't see myself working til 65.

mania112

some do, some don't