Edf pension/ barber factor

Arthur55

Hi I have a deferred pension with edf. I can take my pension on my 60th birthday next year but it will have a13% reduction due to the barber factor. If I was to leave it till i'm 63 there would no reduction. If I took it next year I would get £9689 lump sum and £1453 per year. I'm currently working so not desperate for the money.

Should I take my pension and put it in a nisa or leave it until I'm 63. Thanks in advance for any replys

PeacefulWaters

If my health is good and I don't need it, I'd leave it.

kidmugsy

Arthur55 wrote: »

Hi I have a deferred pension with edf. I can take my pension on my 60th birthday next year but it will have a13% reduction due to the barber factor. If I was to leave it till i'm 63 there would no reduction. If I took it next year I would get £9689 lump sum and £1453 per year. I'm currently working so not desperate for the money.

Should I take my pension and put it in a nisa or leave it until I'm 63. Thanks in advance for any replys

A 13% reduction for being premature by three years is not unreasonable.

What are the index-linking terms on the pension?

How's your health been?

Is your family long-lived?

When do you plan to stop work?

How good is the rest of your pension provision?



If you took the pension at 60, you could put the lump sum into an ISA to generate income for the future, and contribute the £1453 p.a. into a personal pension so that you can have another tax-free lump sum later. (In fact you could also recycle up to £7500 of the capital into a pension too without problems.) Or you could use the £1453 to have a week in the sun each January.

Bootsox

Bit of a long shot but did you leave EdF on a redundancy basis (if so, maybe Barber reduction wouldn't apply)?