Flexible retirement

lorrainer58

Hi

I wonder if anyone has any advice, I have a local government pension due to pay out next year when I am 60.
I now work in the private sector and the job is changing rapidly so I am thinking of reducing my hours under the flexible work arrangements. I have had some figures of how much salary I will lose and as I still have a mortgage to pay am going through the sums.

Today I read that I may be able to take my local government pension this year to assist my flexible retirement, I know this may result in a reduction in benefit but wondered if I have my facts right and if so what steps do I need to take... i.e. do I contact my current employer to agree the flexible working and then once agreed contact LGP scheme to get my money ?
It would really help if I could reduce my hours to three ays a week. Am currently off with work related stress.

Any help much appreciated

Thanks

Lollyrs

AnotherJoe

Without knowing the financial details even speculating is difficult, but it seems to me that since you will get a lifetime lowering of pension if you take it early, then since you are so close, if you can manage finances in that intermediate position between now and then, so you take it at age 60 without any reduction, that's likely to be your best option financially.

If you went down to 3 days a week now, could you survive until you are 60 by cutting back on spending, using savings, whatever, to enable you to get your full pension in what i presume is only 18 months time or so?

hyubh

lorrainer58 wrote: »

I read that I may be able to take my local government pension this year to assist my flexible retirement, I know this may result in a reduction in benefit but wondered if I have my facts right and if so what steps do I need to take... i.e. do I contact my current employer to agree the flexible working and then once agreed contact LGP scheme to get my money ?

Pretty much. Flexible retirement in the scheme is an employer discretion - each employer should have a written policy for it stating in general terms when it would/might be granted - so you will need to contact HR in the first instance.

lorrainer58

Thanks to those who replied, I rang today and as I left in 2005 my pension is frozen until my 60th birthday and is therefore unavailable.


So 13 months and counting.....

Thanks

Lorraine

xylophone

my pension is frozen

Deferred - not frozen.

http://www.leics.gov.uk/index/pensions/local_government_pension_scheme_-_information_for_deferred_members.htm

may be worth a look.

kidmugsy

13 months? Consider interest-free credit cards while you are still employed.

jamesd

0% for purchases credit cards are an excellent solution to this, in part because you can repay with a pension lump sum. The longer deals may mean that instead of lump sum you can pay out of income.

Also worth considering extending your mortgage, some go to 85 or even higher. This could lower mortgage payment a lot and make flexible retirement easier.

jamesd

Are you making pension contributions still?

They are a particularly good deal for those 55 and over because you can pay in then soon afterwards take out 25% as a tax free lump sum. You can do this on at least £30,000 gross a year if your earnings are that high, taking out £7,500 each 12 months (ensure at least 12 months!) because that is the easiest to follow lump sum recycling rule. You can take the 75% later when you will no longer be able to pay in more than £4,000 a year. If you are planning to take a tax free lump sum from LGPS that counts towards the £7,500 a year per twelve months but more detailed planning may come up with higher amounts. You can use savings and borrowing to make the contributions if you stay within the £7,500 or other possibly higher detailed recycling limit.

In effect it's like a free raise, saving you 25% of the income tax on your pay even if you don't use the work scheme.

lorrainer58

some great advice - thanks to all who replied,

yes its deferred not frozen - my bad :-0

I am in a company scheme but only started last year and so not enough in to take out yet.

I am going to sell up and move - that way I can pay off my mortgage and buy outright - this will save me 1100 per month plus heating lighting and council tax costs in a smaller property - so I have the outlines of a plan...

roll on reduced hours and retirement

Thanks

Lorraine