old DB pension

Silvertabby

Had you been on the Christmas sherry? It's a fully funded DB scheme that's been progressively eroded. So I was on track years ago to achieve a lump sum that would clear the mortgage. That went. Was final salary now career average, Government now talking about combining schemes and directing where the investments should go. Etc. And the current full-out drive to a tiny public service makes me wonder how on earth it's going to be sustainable. I've always been altruistic but now I'm looking out for me.

If you mean the 2008 changes, they weren't an 'erosion' but an improvement. Pre 2008 accrual rates were 1/80th with an automatic lump sum of 3 times the basic pension, whilst post 2008 accrual was a much improved 1/60th with the option of giving up some of the bigger pension for a lump sum.

Even the switch to career average wasn't as drastic as you seem to think, as your pre 2014 benefits will still be calculated on your final (post 2014) pensionable pay. The hugely generous career average accrual rate of 1/49th (plus annual revaluation at CPI) means that if you stay at your current pay grade (or even one or 2 higher) until you retire then you could actually be better off on career average.

Silvertabby

“ Was final salary now career average
”
... with an absurdly generous accrual rate (1/49) that meant the CARE scheme was officially costed to be no less expensive than the FS scheme it replaced. Most people in their 50s and 60s have in fact been better off with the change - I don't have any numbers, but anecdotally, some LGPS funds have found the 2014 scheme 'underpin' to have never bitten for a single person, all due to the CARE accrual rate.

hyubh - between 2014 and when I retired earlier this year I only came across one person who benefitted by the 'underpin' - and even that was less than £10 per year!

MoneyLover_2

Current pension = £9,169.50
Value of annuity at age 65 = 30
Assumed inflation to 65 = 2.5% per year
Assumed investment return to 65 = 5.5% per year (likely to be in range of 4-8% per year - this varies significantly from one pension scheme to another)
Years to age 65 = 33

Best guess at value = £9,169.50 * 30 * ((1+2.5%)\(1+5.5%))^33 = c.£105k

But depending on how racy your scheme's transfer value assumptions are it could fall anywhere in the £50k - £200k range.

RuleTheWorld

very interested to get the transfer value but would certainly not consider it any of those levels above.

I would just hold on to it

RuleTheWorld

should be any day now..

RuleTheWorld

transfer value valid for three months: £141,608.68

davieg11

Definitely not worth cashing in. Should be minimum between 20x and 30x the value. £9169.5 x 20 = £183,390.

neilvw

A multiple of 20-30 might have applied to someone in his 50s, say, but the OP is c. 33 years old. The calculation will take into account assumed investment growth over the next c. 32 years.

RuleTheWorld

I think in the future perhaps I could consider transferring but on this occasion not tempted

RuleTheWorld

the low figure actually suggests i would have been better off in a Dc scheme

employer 'contribution' was 38%
employee contribution was 12%