Opinions please?

welshgasman

I have a Merchant Navy Pension due to mature this month if I decide to take it. I was
thinking of deferring it as I am lucky enough not to need it right this moment,
although out of work, I have savings to live off until I get another job. I am 61.

My neighbour (retired fireman) has suggested taking it nevertheless, rather than deferring it, so keen for people's opinions as to the best course of action.?

By my calculations (if correct) by 2017 I will have received a little more pension (albeit only just over £100) by deferring it at least the one year and taking the tax lump sum option.

Is there a general rule of thumb on deferring/taking pensions?

TIA

dunstonh

Is there a general rule of thumb on deferring/taking pensions?

It depends on what you get for deferring vs what you get for taking it. No rule of thumb can apply. Each case is on its own merits.

xylophone

You are male? Are you claiming JSA or any state benefits?

You have a deferred defined benefits/final salary pension scheme from the time when you were a seaman?

The Normal Retirement Age for the Scheme is 61?

What are the benefits offered at NRA?

What is the effect of not taking the pension at NRA on the benefits offered?

Have you obtained a new state pension statement?
https://www.gov.uk/state-pension-statement

welshgasman

xylophone wrote: »

You are male? Are you claiming JSA or any state benefits?

Male. Yet to claim.

xylophone wrote: »

You have a deferred defined benefits/final salary pension scheme from the time when you were a seaman?

That appears correct. The latest pension changes do not apply

xylophone wrote: »

The Normal Retirement Age for the Scheme is 61?

Yes, surprised me I must admit

xylophone wrote: »

What are the benefits offered at NRA?

Pension of £6,256.99 or Lump sum of £28,058.67 and reduced pension of £4,208.80

xylophone wrote: »

What is the effect of not taking the pension at NRA on the benefits offered?

Pension of £6,690.32 or Lump sum of £29,900.33 and reduced pension of £4,485.04 if deferred for a year.

xylophone wrote: »

Have you obtained a new state pension statement?
https://www.gov.uk/state-pension-statement

Will do that Monday. Thank you for the link.

welshgasman

DunstonH,

I've added what figures I have.

xylophone

Regarding state benefits, if you have reached the NRA for your Scheme ( and so can take your benefits without actuarial reduction), then you will be expected to draw your pension or if not, be treated for benefits purposes as though you have.

https://www.citizensadvice.org.uk/benefits/in-work-or-looking-for-work/benefits-for-people-looking-for-work/

How will your pension increase in payment?

Do you have pre and post 88 GMP? What are the figures?

The commutation factor on your pension is not very generous.

justme111

It would take you like 20 years to recover that year of deferred pension amount so I would just take it now if I were you

kidmugsy

justme111 wrote: »

It would take you like 20 years to recover that year of deferred pension amount

Not even close.

welshgasman

I have since worked out the figures as shown below

First pair of figures are for 2015 and second pair are for 2016 and third pair the difference.
Just taking the pension only looks a poor prospect, and the cash lump sum does not appear to be the better option until 2025, and I have no idea if I'll even be alive by then.

So thank you all, I will take the money and run.

Thank you also for the link re benefits and pension. That will come in handy if I decide to claim if unsuccessful in the next few months.

		2015	2015		2016	2016		Diff	Diff
		Full	Part		Full	Part		Full	Part
									

2015		£0.00	£28,058.67		£0.00	£0.00		£0.00	-£28,058.67
2016		£6,256.99	£32,267.47		£0.00	£29,900.33		-£6,256.99	-£2,367.14
2017		£12,513.98	£36,476.27		£6,690.32	£34,385.37		-£5,823.66	-£2,090.90
2018		£18,770.97	£40,685.07		£13,380.64	£38,870.41		-£5,390.33	-£1,814.66
2019		£25,027.96	£44,893.87		£20,070.96	£43,355.45		-£4,957.00	-£1,538.42
2020		£31,284.95	£49,102.67		£26,761.28	£47,840.49		-£4,523.67	-£1,262.18
2021		£37,541.94	£53,311.47		£33,451.60	£52,325.53		-£4,090.34	-£985.94
2022		£43,798.93	£57,520.27		£40,141.92	£56,810.57		-£3,657.01	-£709.70
2023		£50,055.92	£61,729.07		£46,832.24	£61,295.61		-£3,223.68	-£433.46
2024		£56,312.91	£65,937.87		£53,522.56	£65,780.65		-£2,790.35	-£157.22
2025		£62,569.90	£70,146.67		£60,212.88	£70,265.69		-£2,357.02	£119.02
2026		£68,826.89	£74,355.47		£66,903.20	£74,750.73		-£1,923.69	£395.26
2027		£75,083.88	£78,564.27		£73,593.52	£79,235.77		-£1,490.36	£671.50
2028		£81,340.87	£82,773.07		£80,283.84	£83,720.81		-£1,057.03	£947.74
2029		£87,597.86	£86,981.87		£86,974.16	£88,205.85		-£623.70	£1,223.98
2030		£93,854.85	£91,190.67		£93,664.48	£92,690.89		-£190.37	£1,500.22
2031		£100,111.84	£95,399.47		£100,354.80	£97,175.93		£242.96	£1,776.46
2032		£106,368.83	£99,608.27		£107,045.12	£101,660.97		£676.29	£2,052.70
2033		£112,625.82	£103,817.07		£113,735.44	£106,146.01		£1,109.62	£2,328.94
2034		£118,882.81	£108,025.87		£120,425.76	£110,631.05		£1,542.95	£2,605.18
2035		£125,139.80	£112,234.67		£127,116.08	£115,116.09		£1,976.28	£2,881.42
2036		£131,396.79	£116,443.47		£133,806.40	£119,601.13		£2,409.61	£3,157.66