PIE advice

Eros1000

I have a Defined benefit company pension scheme which Im due to receive in October 2019 when I reach 65. I started it in 1974. The sceme was closed December 2012. A recent estimate for taking it in October next year was £15950.

However, I also received estimates for taking the pension a year early in October 2018. One was for taking a reduced amount (£14830) which with a 7% reduction factor I have discounted. The other was for a PIE scheme which is what I would welcome comments on.
The PIE estimate was £16518. I would receive a higher initial pension in exchange for giving up 2.5% pa increases of my non-GMP pension earned prior to 6 April 1997.
I would receive annual increases on the following basis. Pension earned April 1997 - November 2008 : lower of 5% and RPI increases pa.
Pension earned December 2008 - Dec 2012 : Lower of 2.5% and RPI increases pa.
The crossover point (when exchanged pension equals my scheme pension increase) is estimated at age 74 and the break even point (when total pension payments received will fall below total payments had I not exchanged the 2.5% pa increases) when I am 82. The estimate assumed annual pension increases of 2.5% after April 1997.

If I waited another year I will again be given the option of the PIE scheme which I presume will be more than the present estimate.
I guess a lot is down to how long my wife and I might live - though both of us have enjoyed good health over the years.

I would appreciate the views from the forum.

kidmugsy

Please summarise the index-linking on the standard pension.

Brynsam

See https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/when-relationships-end/transfer-incentives-increase-exchange

and

http://www.thepensionsregulator.gov.uk/docs/incentive-exercises-statement-july-2012.pdf

Dox

Eros1000 wrote: »

If I waited another year I will again be given the option of the PIE scheme which I presume will be more than the present estimate.
I guess a lot is down to how long my wife and I might live - though both of us have enjoyed good health over the years.

Presuming is a dangerous activity! Have you checked to see if the scheme can confirm the position if you wait a year?

As you say, a lot is down to how long you think you will live - and what you believe inflation is likely to be. In other words, which risks are you more comfortable taking? That is something only you can answer.