Thoughts on our early retirement plan

xylophone

Your pension is likely to have a GMP element and an excess over GMP - in your case, the GMP has to revalue by 8.5% each year up to GMP age.

However, as you left before 1 January 1986, it is possible that there has been no revaluation of the excess.

This is not necessarily the case however as it may be that the Barclays Scheme is more generous than the statutory minimum.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

What does your scheme booklet say about how a deferred pension increases in deferment?

enthusiasticsaver

I have a letter from Towers Watson telling me how to calculate the GMP deferred pension £221 and a revaluation in 2001 which matched up with my spreadsheet calculation at putting in 8.5% increase every year for 34 years so the pension is looking like it will be around £3500 in 2020 with the possibility of it reducing in 2026 when my SPA comes in. The booklet says it will go up in deferment by 8.5% per annum but after it pays out it will reduce but it is not explicit by how much. I was surprised it was so much tbh and a friend of mine who also left Barclays at roughly the same time had not been keeping up with her deferred pension until I mentioned it. She thought she was just going to get the GMP and had forgotten about the annual increases.

xylophone

Did your statement of deferred benefits on leaving show any excess over GMP?

enthusiasticsaver

xylophone wrote: »

Did your statement of deferred benefits on leaving show any excess over GMP?

I have looked through all of my paperwork and there is no mention of excess so not sure what that is. The last correspondence I had from Barclays confirmed I have a pension made up solely of GMP of £221 a year which receives deferred increases of 8.5% a year. They said to calculate the value of my GMP at age 60 I should use the formula:


GMP at date of leaving(£221) x number of years from date of leaving to GMP payment date (2020-1986 so 34 years)to the power of 1.085. I calculate that at £3840 per annum.


What is an excess?

xylophone

Then it would appear that the whole of your pension is made up of GMP which for nine years in the scheme seems a little odd.

Presumably TW have advised that there is no obligation for the scheme to index link it once in payment as it is all pre 88 GMP?

If it is all GMP I am wondering whether there will be any reduction at scheme pension age.