Deferring taking my Final Salary pension

GaryBC

Hi guys

I'm sure there's no simple answer but is there any advantage in deferring taking it? I'm 60 next birthday so there's no immediate rush to find out.
The way I see it is that I will be paid a fixed income based on the salary I was earning and my length of service. As it is a fixed amount then - unlike a savings plan - it's not going to grow over time.
Therefore I may as well take it - even if I've not yet retired.
Yes?

Cheers,#Gary

jem16

GaryBC wrote: »

Hi guys
The way I see it is that I will be paid a fixed income based on the salary I was earning and my length of service. As it is a fixed amount then - unlike a savings plan - it's not going to grow over time.
Therefore I may as well take it - even if I've not yet retired.
Yes?

The answer will depend on whether or not you have reached the scheme's maximum number of years service. If you have not and are still able to contribute then you will be increasing the number of years and the salary may well be increasing too so yes your pension would increase.

What does your scheme's booklet say as that is what matters.

GaryBC

Ah, I left out one crucial piece of information!
It's a company I no longer work for so am not making any more contributions

jem16

GaryBC wrote: »

Ah, I left out one crucial piece of information!
It's a company I no longer work for so am not making any more contributions

Then there is likely to be no advantage in leaving it and you would probably lose out by not claiming it.

You could always pay it into a new pension and get some tax relief especially if higher rate tax is involved.

Daniel54

I deferred both my private sector DB schemes .You will need to check with the administrators , as others have said.

One scheme said there would be an actuarial increase,but not how much .I had to get estimates from them every six months to see how it was moving -turned out to be 7.5% increase for a 12 month deferral and an improved PCLS commutation ratio.I had to be in continued employment in order to defer.

The other required trustees' agreement ( which was given by return ).They stated that the pension would increase by 8% pa in deferral ,but that this could change in the future.

If you are going to continue working after the NRD of the pension schemes,it is at least worth checking the approach of your individual schemes.

t0rt0ise

You really do need to read the handbook rules because these schemes to vary. My final salary pension has a normal retirement age of 65 but as I'm no longer working there I could take it at 60 with no loss and in fact there was no advantage in leaving it to 65. So I was very glad that I'd looked into it. I did ask the pension company about it and they ignored my questions. So you need to do your own homework.

AlanP_2

With my deferred DB scheme, which can be taken at 60 with no reduction, leaving it to Age 65 increases it by 7% pa based on current actuarial rates in use so a others have said check with them.

xylophone

Make sure that you ask the right questions.....

https://forums.moneysavingexpert.com/discussion/comment/69125159#Comment_69125159