Help I feel swindled

xylophone

I fear that when I was young and carefree, while I knew that I had a pension and that was "a good thing", the details simply passed me by "like the idle wind I regarded not..."

With advancing years came wisdom....:D

OldMusicGuy

A lot depends on the parents to impart some advice. Sadly, my dad was from the postwar generation, so his advice was get a sensible job, stay in it for 30 plus years and retire with a nice pension at the end of it. He had no conception of how my work life would be, working mainly in the IT industry with no DB pensions. So he gave me no advice whatsoever and pensions were a mystery to me until my 30s (far too late!). My FiL was the same, and he says it was so easy for his generation that simply didn't have to worry about pension planning.

The first job I had came with a non-contributory DB pension. I left after 4.5 years to move into a job with no pension at all. Why didn't someone tell me that if I had waited 6 months and left after 5 years I would now be in receipt of a small pension for life!!!! Old me is kicking young me for just not hanging on a bit longer, but of course at the time I paid no heed to anything like that.

zagubov

hyubh wrote: »

And yet you found out somehow? Scheme booklets, scheme website(s), benefit statements, ringing the administrator up and asking...? That said, this particular scenario will vary between schemes and scheme sections, as actuarial increases for late retirement may apply, or apply from a certain point, etc.



Playing the straight man... the internet is an open framework for people to do what they want. Like, say, set up or even participate in a website and set of forums dedicated to consumer finance, including pensions...

I'm not claiming there's a conspiracy to hide anything, just noting that t'interweb isn't there for our benefit, it's mainly a business medium. It's not there to inform us of how to make best use of what many would deride as a perk.

This forum is a notable exception.;)

hyubh wrote: »

There are lots, including government ones. However, sites about modern DC pensions (which is where you are going with that) will have weak relevance to people in good DB schemes like the OP, and it seems yourself.

The complexity of the schemes in my profession are challenging.My workmates aren't all in the same version in the scheme and some are in multiple versions.

mollycat wrote: »

The opposite view might be that people who want to assume responsibility for their financial futures will have all the above considerations on their radar well before one year out; ie it's not a big, bad multi-national conspiracy that you haven't thought about your pension, the answer I think is closer to home.

Did all the DB pension upheaval around 2011-2012 that was never out of the news never prompt you to think, "hey, wonder when it is I can retire".

Given that you seem an educated fella I wonder if you always have known when to apply for you DB pension, but the temptation to make a political point was just too much!

Just my opinion mind, nothing personal

Edit....beaten to it by hyub, well said.

No.

Terron

zagubov wrote: »

I'm not claiming there's a conspiracy to hide anything, just noting that t'interweb isn't there for our benefit, it's mainly a business medium. It's not there to inform us of how to make best use of what many would deride as a perk.

I started using the internet before the World Wide Web was invented and it wasn't mainly for business then. Yes I accessed it mainly through work but mainly USENET forums.
I was working for the company that invented SPAM, but it hadn't really taken off.
Of course once the bandwidth had increased a bit a particular industry did start to dominate - https://www.youtube.com/watch?annotation_id=annotation_87171&feature=iv&src_vid=QKNnwLL991c&v=LTJvdGcb7Fs

Terron

OldMusicGuy wrote: »

A lot depends on the parents to impart some advice. Sadly, my dad was from the postwar generation, so his advice was get a sensible job, stay in it for 30 plus years and retire with a nice pension at the end of it.

My father and mother worked for the NHS so they were the same, though as the pension scheme at my first job was only for managers my father did find someone to advise me. It is only in the last few years that I have realized how good the pensions he sold me are - 10.6% GAR. I hadn't paud much attention to that bit of the small print.

kinger101

sue139uk wrote: »

I have "lost out" massively. I have found out this year that fellow workers who drew their pension early and invested the lump sum have seen it increase by more than inflation.

Over the long term, one expects investments to increase by more than inflation, particular if it's in shares/funds.

But you're working in the assumption of hindsight. If I'd put all my savings on the winner of yesterday's winner of the 15.40 race at ascot, could have handed in my notice on Monday and retired.

You were presented with facts (pension will be substantially reduced if you take it at 55) and took what most would have regarded as the correct decision. Presumably, on the basis that you wouldn't have been able to live comfortably off that income.

There's no point comparing your situation to someone else's. It's possible they were fortunate enough to be able to live off the reduced pension and aim for long term capital growth of their redundancy payment. Luckily, they've done it in a period of prolonged stock market growth. Their capital was at risk the entire time (particularly if they needed to draw on those funds within a timeframe of less than 5-7 years).

We all just have to play the hand we're dealt unfortunately.

Terry_Towelling

Sorry I haven't read all the posts in this thread (and I can see it has moved away from the OP) but my life story followed similar lines - except that I was aware of the reduction for taking the pension early. I was also aware that it would be reduced (for life) if taken early and that taking it early is at the discretion of the trustees anyway. I took Voluntary Redundancy too and the Trustees made a general statement that they would usually pay early to such individuals.

Anyway, much depends on the NRA of the scheme but I did a lot of projections into the future for mine and in the end you usually lose out in the long-term if you take the pension early.

Ignoring annual increases, a reduced pension at, say, £10K from 55 will give you £200K by age 75. Taking it at full value, say, £13.3K from 60 also nets you £200K by age 75. From that point on you are actually gaining over those who took it early.

Big deal, I hear you say; I might not live that long. True but the maths is reasonable. The only other thing to factor in (which I haven't here) is the effect of taxation. Taking it early might keep you under the personal allowance for ever. Waiting until NRA might put you over and you then lose a portion each year to tax which will delay the 'break-even' point.

I knew all this when I took mine early but unexpected life events didn't really give me any choice.

So, OP given reasonable life-expectancy, you probably won't lose out in the longer term as far as the pension payouts are concerned but you may have lost out to a degree by having to spend your savings on just getting by - and don't confuse your works pension with the state pension.