Help with understanding pension statement

1964johnr

I am 54 and have had to stop working due to ill health. I don't qualify for medical retirement with my pension because I am expected to make a full recovery in time. I asked my pension provider, LPFA to provide me with informatio as to how much pension I could expect if I take my pension next year at age 55. I have 21 years pension contributions. It is a deferred scheme which I left 7 yeats ago. I received the information today but want to check that I understand the figures correctly.
It says that my pension if I took it at age 55 would be £6256 pus pensions increase of £926, so totalling £7182. It also says that this is a reduced figure due to taking the pension early. The reduction was £2350 per annum. In addition there is something called a retirement grant which is £20579. This figure has also been reduced by £2845 due to taking the pension early. Am I understanding the figures or am I missing something like tax or something else? Is a retirement grant a lump sum? Any help would be greatfully received.

atush

The retirement grant is effectively your Tax free lump sum.

The reduction will be x% a year times 10+ years to scheme age.

Silvertabby

Assuming that LPFA = London Pension Fund Authority, that's the LGPS (Local Government Pension Scheme).

You have Rule of 85 protections in respect of your pre 2008 service, but they would only apply in full if you don't take your pension until age 60. If you can manage that, then the early payment reductions in respect of your (3 years?) post 2008 service will be far, far less than the £2350 and £2845 that would apply if you take your benefits at age 55.

Without going into details, is it possible that your health could deteriorate? The reason I ask is that if you apply for access to your deferred benefits on ill health grounds in a year or two, and are approved, then NO reductions for early payment would apply.

1964johnr

Thanks for the info, it is very usefull. My health is not likely to deteriorate, but it is not possible to predict if and when I will recover. I have been getting slowly better over the last six months, so am hoping this continues to the point where I will be fully recovered, but not taking my pension until age 60 is something I need to look at after reading your reply.