Government retirement rules before 55

jem16

sav500 wrote: »

A Final Salary pension. I've just checked a note that I was sent from the pensions dept. just after I finished which gave my figures based on my normal retirement date. It then mentions that I can commence the pension any time after age 50 subject to an actuarial reduction. That's what I thought.

If that note was pre 2010 it will have been age 50. However that may well have changed now so you would be advised to check.

wannaberetiree

In my policy it states I can take it at 50 and must take it by 75. There is no mention of any reduction. It is just that now tat they are saying that government rules say I can no longer take it at 50 it has gone up to 55. I can find nothing in my policy that states they abide by government pension age.

dunstonh

wannaberetiree wrote: »

In my policy it states I can take it at 50 and must take it by 75. There is no mention of any reduction. It is just that now tat they are saying that government rules say I can no longer take it at 50 it has gone up to 55. I can find nothing in my policy that states they abide by government pension age.

There won't be.

mgdavid

basic rule of precedence; the law of the land over-rides any company or organisation's rule or condition, did you not realise this?
Often not retrospectively - but can be!

molerat

The majority of these pension scheme booklets will, hidden somewhere in the pages of bumph, have the caveat "under current legislation".

magpiecottage

wannaberetiree wrote: »

Some companies offer to help you get money out of your pension before you’re 55.

That will almost certainly be fraudulent. They will take your money out and you will never see it again.

However, the tax man will still make you pay the tax on the money - despite having received no proceeds from which to pay it.

wannaberetiree wrote: »

In my policy it states I can take it at 50 and must take it by 75. There is no mention of any reduction.

That sounds like a defined contribution (or money purchase) scheme. Such schemes work on the basis that you have your own pot of money and when you retire you get whatever is in the pot and use it to buy an income (possibly taking some as cash).

Under the old rules some individuals could take benefits before 50 because of their occupation. I remember there was some consternation about 20 years ago because an exam organised by the Chartered Insurance Institute asked what age hammer throwers could take pension benefits from because it was such an obscure thing to ask. (It was 40 in case you are interested and it was 35 for professional footballers). These tended to be personal pensions, though.

There was then a group of people who could take pensions between 50 and 55 but these tended to be final salary schemes. They included the armed forces and also the police and firefighters' schemes if at least 25 years' service had been completed. Complex rules also meant some people in local government who joined very young could do so as well.

Finally, there were groups of people who had already been given a contractual promise that they could have a pension early. This applied, for example, to some members of the electricity supply scheme who had been made redundant.

However, in the case of the OP, they appear to be one of many in an arrangement where the government moved the goalposts.

With regard to the pension misselling review, mistakes were made by insurance companies and advisers. Do not kid yourselves that they alone were at fault, though.

As dunstonh has pointed out, this was a government initiative - and it was the government that paid for the TV adverts at the time.

Neither FIMBRA nor LAUTRO, the regulators at the time stipulated a need to carry out a critical yield calculation - or indeed gave any guidance on how it might be done.

When the Personal Investment Authority took over, and persuaded the Securities and Investments Board (now known as the Financial Conduct Authority) that action should be taken, it took two years even to decide how it should be tackled.

I also know, because I investigated many transfers, that many schemes paid transfer values far below a fair reflection of their liabilities to former members. The result? More money was retained in the scheme and the employers (frequently scheme trustees) needed to put less of their own money in to maintain it.

Yes those responsible for recommending the transfer were forced to pick up the tab - but they were far from the only party at fault.

gadgetmind

molerat wrote: »

The majority of these pension scheme booklets will, hidden somewhere in the pages of bumph, have the caveat "under current legislation".

Well, quite. HMG could change the age from 55 to 75 (or 125!) tomorrow and there is nothing we could do about it.

crystal_pixie_2

Sav50 - you must be in a different RR scheme to me - mine says 55!

zagfles

magpiecottage wrote: »

I also know, because I investigated many transfers, that many schemes paid transfer values far below a fair reflection of their liabilities to former members. The result? More money was retained in the scheme and the employers (frequently scheme trustees) needed to put less of their own money in to maintain it.

If the transfer value was "far below" a fair reflection of the scheme's liability, ie the member's asset, then why would any adviser recommend the transfer? Your pension's worth eg £50k, the scheme offer a transfer value of eg £30k. Yeah that's a good deal, go for it!

Obviously nothing whatsoever to do with the fact that the adviser would get nothing by recommending they stay put in the occupational scheme and they'd get the next 2 year's premiums and probably a cut of the £30k if they decide to transfer.

Yes those responsible for recommending the transfer were forced to pick up the tab - but they were far from the only party at fault.

They made the recommendation that the member sells an asset worth £50k and use it to buy one worth £30k, and they got the commission for recommending that course of action. Dead right they should pick up the tab.

SnowMan

zagfles wrote: »

If the transfer value was "far below" a fair reflection of the scheme's liability, ie the member's asset, then why would any adviser recommend the transfer? Your pension's worth eg £50k, the scheme offer a transfer value of eg £30k. Yeah that's a good deal, go for it!

Indeed.

But in any case there was very clear guidance on how transfer values should be calculated, that was followed in calculating transfer values. So transfer values were fair. For example the interest rates had to be based on gilt yields and incoming and outcoming transfer bases had to be consistent.

In some cases schemes paid discretionary increases if scheme funds allowed. In calculating transfer values it was not reasonable in many cases to allow for these future discretionary increases as it would have not have been fair to remaining members to capitalise the value of an uncertain promise into the transfer value of those transferring away, and could have jeopardised the scheme's solvency. In those cases schemes produced information with transfer values to explain that allowance hadn't been made for discretionary increases. However these were routinely ignored by the advisers, presumably on the basis transfer = commission, no transfer = no commission.

The reason that transfers made no sense in most cases were the large commissions and hence expenses involved in the transfer made the required returns for the personal pension to match the scheme benefits very high. It was not reasonable to expect the scheme to cover these commissions in calculating the transfer value. That's not a case of unfair transfer values, but unreasonable expectations that transfer values should not only be sufficient to cover the scheme benefits, but enough to cover adviser commissions also, and of course the pension provider wanted their cut of expenses also.