Taking a DB Pension Early

amandajc

kidmugsy wrote: »

He's retiring in 3 months' time: are you tempted to make a bolt for it at the same time? The other question is whether you will have enough income when your husband dies.

I'm certainly tempted but it would reduce my pension by £1,000 pa if I don't stick it out for another couple of years and 56 does feel pretty young to retire. Continuing to work could turn out to have been a big mistake though. Wish I had a crystal ball. :-(

As to your other question - I'll be fine. I would be entitled to half my husband's pension and downsizing the house or selling the rental flat is always an option. We would like to be able to leave a fair chunk to help out our two sons who have both inherited my husband's polycystic kidney disease, but hopefully there will be enough at the end of the day to keep everyone afloat.

kidmugsy

Afterthought: have you checked that you'll have your 35 years of National Insurance Contributions credited to you?

kidmugsy

Afterthought 2: on another thread "alterego" explains that by getting his pension income below the personal allowance, there's another advantage. "In addition I will be able to transfer £1060 of my personal allowance to my working wife ... that's another £200+ pa on her pay ticket."

amandajc

saver861 wrote: »

Is there any chance of getting redundancy? Obviously if you can get it then you will have the pension and lump sum without reduction - a much better position...

So, unless there are specific tax reasons for not taking it, taking it early is often a good option.

If you live to be a 100 then you might think .... darn it.

Redundancy might well be an option and I have expressed an interest if it is. This has been taken seriously enough for my boss to put in place "succession planning" and I am currently training someone to take over my role. However I'm not counting any chickens, things are pretty wobbly in local government at the moment.

If I do live to be 100 I reckon the only thing I'll be thinking is "How did I manage to get away with that then?" :-)

BobQ

Are your defined benefits based on a Final Salary or a Career Average?

If a FS, what calculation is done of your best year? Last year? Best of last 3 years, 5 years? Is that best year uprated for pension?

If you take the pension early or defer it will rise by CPI I imagine. If you stay working it will go up based on salary. Which will rise quicker?

All guesswork I know!

amandajc

kidmugsy wrote: »

Afterthought: have you checked that you'll have your 35 years of National Insurance Contributions credited to you?

I think I'm OK on this as I was in full time education to 21 and have worked since then apart from 10 years out to look after the kids (claiming family allowance). I do need to get this confirmed though. Thanks.

amandajc

kidmugsy wrote: »

Afterthought 2: on another thread "alterego" explains that by getting his pension income below the personal allowance, there's another advantage. "In addition I will be able to transfer £1060 of my personal allowance to my working wife ... that's another £200+ pa on her pay ticket."

I haven't heard of this - so if you don't use your personal allowance you can transfer some to your spouse? Could be useful if so.

saver861

amandajc wrote: »

Redundancy might well be an option and I have expressed an interest if it is. This has been taken seriously enough for my boss to put in place "succession planning" and I am currently training someone to take over my role. However I'm not counting any chickens, things are pretty wobbly in local government at the moment.

If you can get it then you are way up on luck. Not only will you have the unreduced pension and lump sum but you get some redundancy dosh also. :j

They are reducing the redundancy formulas though and I think next year it will be the basic redundancy pay without any enhancement. However, you are right about the chicken counting - even if they agree to give it to you, they can change their mind and take it back, e.g. if someone else hands in their notice during your redundancy notice period. That's the squeaky bum period ....

amandajc wrote: »

If I do live to be 100 I reckon the only thing I'll be thinking is "How did I manage to get away with that then?" :-)

Aye ... you and all the others too ... ;-)

amandajc

BobQ wrote: »

Are your defined benefits based on a Final Salary or a Career Average?

If a FS, what calculation is done of your best year? Last year? Best of last 3 years, 5 years? Is that best year uprated for pension?

If you take the pension early or defer it will rise by CPI I imagine. If you stay working it will go up based on salary. Which will rise quicker?

All guesswork I know!

The LGPS is now based on career average but most of my pension will actually be assessed on a final salary basis due to legacy scheme rules. The rise due to CPI on my pension is probably higher than the salary uplift would be but I'm not proposing to continue to work - just wondering whether to take at 60 or defer to 65.

Guesswork it certainly is :-)

saver861

amandajc wrote: »

I haven't heard of this - so if you don't use your personal allowance you can transfer some to your spouse? Could be useful if so.

https://www.gov.uk/marriage-allowance

When your husband retires, if he does not use his full PA he can transfer £1000 of that allowance to you. You need to be earning more than £10,600 and less than the 40% threshold to qualify.