Is it worth a delay

Smosal

I have a DB pension due to start shortly. However if I delay payment until January 2019 then I will get the annual CPI uplift, probably worth an extra 2.3%, plus an adjustment for the delay. In total, it would make a difference of around £1000 per year. Does it makes sense to delay the start date which I intend to do, or have I missed anything important that I should take in to consideration, thank you.

Dazed_and_confused

So if you take the pension now will you have to wait a year and a bit before the first annual CPI uplift is applied?

Terry_Towelling

As Dazed and Confused has intimated, surely you still get an annual CPI uplift if your pension is in payment.

What is the breakdown of the differences you think you'll see? How much is down to the CPI uplift and how much extra relates to the delay?

There may be tax benefits to delaying your pension depending on your other income to date this tax year and what other income sources you will also have when your pension is in payment. That will require a few sums to work out.

Smosal

Once in payment, there is no inflation link applied, just discretionary increases and there have been none applied for some years, as the scheme is in deficit.

Peelerfart

Hi, which scheme is this, who is/was your employer?

Terron

I have a DB scheme like that, from DEC. I left in 1994, so pre 1997 when such increases became mandatory. There is a GMP currently increasing at 7% a year so eventually a large part will be subject to inflation increases capped at 3%.


Do you have a GMP? What system is being used to increase it?

AnotherJoe

Smosal wrote: »

I have a DB pension due to start shortly. However if I delay payment until January 2019 then I will get the annual CPI uplift, probably worth an extra 2.3%, plus an adjustment for the delay. In total, it would make a difference of around £1000 per year. Does it makes sense to delay the start date which I intend to do, or have I missed anything important that I should take in to consideration, thank you.

How much is the pension per month ? Should be easy to do the maths with that. Offhand it seems likely that delaying is best as Jan is so close.

xylophone

When do you reach (or have you already reached) State Pension Age?

If in the future, have you obtained a state pension statement?

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

bluenose1

To get an idea I would work out what you would get from when the pension is meant to start until the deferred pension would start in January 19. Eg September 18- December 19. Then compare it with how much that extra £1000 a year would be if I lived to a decent age.

AlanP_2

Terron wrote: »

I have a DB scheme like that, from DEC.

Me Too.


OP - What age are you? The DEC scheme can be taken unreduced at Age 60 but increases by 7.5% p/a if you don't take it then.

Do you need to take the pension now?