Accessing pension at 55

Loobyloo22

I work for Glasgow City Council and we have been told we cannot access our pension till we are 60. How come everyone else can access at 55? Is this legal ?

xylophone

You are in the Local Government Pension Scheme?

If so, this is a Defined Benefit Pension Scheme and you are bound by the rules of the scheme.

xylophone

And see http://www.pensionsadvisoryservice.org.uk/content/spotlights-files/uploads/What_are_my_options_after_April_2015_SPOT025_V_1_2.pdf

LHW99

Presumably its a defined benefit scheme? The rules for these are different

AnotherJoe

How come everyone else can access at 55
=====

You have misunderstood. Workplace schemes have their own rules. Mine is 65, unless i take a reduction. Others like yours will have a cut off date before which, no access. You may find if you access yours at 60 there is a reduction and there is still a 65 rule. Or you may not.

You will also likely find, as a defined benefit scheme, that its not in your financial interest to take it as a lump sum.

Sometimes they will make an exclusion for people with a serious illness.

hyubh

Loobyloo22 wrote: »

I work for Glasgow City Council and we have been told we cannot access our pension till we are 60. How come everyone else can access at 55? Is this legal ?

Yes. As the others have said, there is no particular standard for minimum voluntary early retirement ages in DB-land. In fact, there isn't even one across the national versions of your scheme (i.e., the LGPS) - the minimum age went down to 55 in England and Wales in 2014, but remained at 60 in Scotland, unless (as before) with employer consent, which is unlikely because it may cost them (cf. https://www.pensions-ombudsman.org.uk/determinations/2016/po-6015/local-government-pension-scheme/ - concerns an English LGPS fund, but same issues would apply for a Scottish council too).

That said, assuming good health, you would have to be pretty desperate to voluntarily take a DB pension a decade or so early, because the actual reduction would be quite hefty (http://scotlgps2015.org/content/when-can-i-retire-0).

atush

The rules you are thinking of, are for money purchase pensions. Which is not the type you have.

If they allowed you to take yours at 55, i suggest it will be reduced in value by at least 50%

jamesd

There's a general solution to this problem: you also pay into a personal pension then you live on the personal pension pot until you reach the normal retirement age for the defined benefit pension. If that won't do the job then something like a mortgage taken out while still working can provide the money and you can repay faster once the pension starts if you like, or wait until the state pension is also coming in. Equity release of the type that lets you draw money as you need it is another option that can get the job done.