Advice needed please.

jamsa

I have a final salary pension that was frozen when i left that job after 17 years. It still accrues value at either inflation or 4.5 percent which ever is the greater. It was a contributory scheme and it was an opted out of the higher NI contributions. I'm now 58 soon and can draw it now at £5300 per annum approx.
I get a RN pension when I am 60 with a small lump sum and pension,and I can leave my current local authority post and also get a 3,000 pension now but am putting a lot in AVC's atm too to have a lump sum at 60 or later.
So my dilemma is do I leave the final salary pension alone until I am 65 and hope it grows nicely, or do i start taking it now as Id receive a total of £35,000 over the next 7 years from that pension which is possibly lots more than waiting to get a little bit more each year from 65? do I jump or do I wait and any experienced folk care to advise if they have been in a similar situation...Dont have a mortgage and don't intend taking any lump sums just now either... thank you

greenglide

I have a final salary pension that was frozen when i left that job after 17 years.

Clearly it isnt "frozen" as you say it is increasing. It will be "deferred", there is a huge difference.

I'm now 58 soon and can draw it now at £5300 per annum approx.

What is the normal retiring age for the scheme? The scheme may stop increasing with deferment after the NPA.

Does the £5,300 include a reduction for taking it early?

Does the pension include a GMP? The scheme may not need to increase the GMP when SPa is reached.

xylophone

I have a final salary pension that was frozen when i left that job after 17 years. It still accrues value at either inflation or 4.5 percent which ever is the greater.

Not frozen then but simply deferred.

Have you obtained a new state pension statement?

When do you wish to leave paid employment?

jamsa

The normal retirement age is 65 and the £5300 is a lower estimate and that is the value at today so lowered already for the quote.
Yes GMP is a small proportion of the £5300 and probably wont increase once started to be drawn...

jamsa

xylophone wrote: »

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Not frozen then but simply deferred.

Have you obtained a new state pension statement?

When do you wish to leave paid employment?

I have a National state pension statement and it shows more than 35 years paying full NI contributions but I know this is wrong as the pension I refer to was opted out of the higher contributions for the 17 years I worked for that company.
I cannot afford to make up the shortfall to increase the value of my state pension but by the time I am 65 I suspect it will be means tested anyway as that's what the SNP and Labour have planned.
I am getting 20% tax relief of my AVC's so paying no tax so will pay tax on the pension if i draw it from now...

xylophone

I have a National state pension statement and it shows more than 35 years paying full NI contributions but I know this is wrong as the pension I refer to was opted out of the higher contributions for the 17 years I worked for that company.

You have the years of full contribution to a basic (old) state pension - you contracted out of additional state pension but may nevertheless have accrued some depending on your personal circumstances.

What exactly does your statement say?

https://www.gov.uk/check-state-pension

Have a look at this

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

jamsa

What exactly does your statement say?


Thanks, I appreciate input as I am a complete novice to this "minefield"... The state pension forecast is £155.65 a week at maximum from 2025, or just 130 a week if I stopped making NI contributions and the COPE value is est £71.60 a week which would have been the additional pension had my pension not been contracted out...

xylophone

It appears that you are still working for a Local Authority - you are still making NI Contributions?

You have not been contracted out in this employment since 6 4 2016.

Your contributions since then will be increasing your state pension.

https://www.gov.uk/new-state-pension/how-its-calculated

If you leave employment and are not entitled to credits, you will be able to make voluntary contributions up to state pension age.

With regard to your deferred FS pension, if you draw it at age 58, the scheme should index link the pension in payment by scheme rules until you reach age 65 (assuming that you are male) or 60 (if you are female).

After that, the scheme has no obligation to index link the pre 88 GMP or the post 88 GMP by any more than 3% CPI.

This may also apply to your Royal Navy pension

http://www.pathfinderinternational.co.uk/index.php?option=com_content&task=view&id=3147

but



https://www.gov.uk/government/consultations/indexation-and-equalisation-of-gmp-in-public-service-pension-schemes/consultation-on-indexation-and-equalisation-of-gmp-in-public-service-pension-schemes

greenglide

I suspect it will be means tested anyway as that's what the SNP and Labour have planned.

Where did you get that one from?

To means test the state pension would be a massive change and take years to implement - what would happen to people who are already in receipt of the state pension, would they be means tested?

I suspect you have been reading the Daily Express or the Daily Mail and believing what the say.

The Conservative Party wanted to means test the Winter Fuel Payment - is this what but mean (by a different party as well).

jamsa

greenglide wrote: »

Where did you get that one from?

To means test the state pension would be a massive change and take years to implement - what would happen to people who are already in receipt of the state pension, would they be means tested?

I suspect you have been reading the Daily Express or the Daily Mail and believing what the say.

The Conservative Party wanted to means test the Winter Fuel Payment - is this what but mean (by a different party as well).

I asked the SNP are they planning to means test state pension in Scotland, they refused to answer. I would have thought they would say absolutely not, Mr Corbyn recently stated that he thought it was quite wrong for those to have private pensions to be in receipt of a state pension when there is so little money to go around in an ageing population, so means testing would be looked at as a way forward. I read the comments and it wasn't the Express or Mail etc, it sure scared the hell out of me! Whats the point of working!

AlanP_2

jamsa wrote: »

Whats the point of working!

To me the point of working is to pay for what I and my family need / want now and to provide cash that I can put away for retirement.

It isn't to build up an entitlement to a State Pension. If the SP was scrapped entirely I would still need to work to achieve the two outcomes I am after, in fact I would need to work longer to save more personally for retirement.