should i start taking a pension early?

mumsiedebs

I left a previous employer in February 2003 and my final salary pension for pre 2002 benefits was claimable from age 60 and post 2002 benefits claimable without loss from age 65. (so whenever i claim i get an element of early and late payment sums)
Im almost 62.
Its not a huge amount but certainly better than my LGPS since 2003 so i need to be careful about what choices I make.
What factors do i need to consider? I can claim a lump sum now and save it together with my pension or wait longer and let it build up more. I have a small savings amount which i have just bought premium bonds with as no interest from the bank.
Id really like to retire but even with both pensions its only about half what calculators tell me i will need.
Where do I start?

Dox

Forget the calculators. Do your own sums and work out what your outgoings are - the essential ones (housing, utilities, food etc) + the nice to have but non-essentials (entertainment, holidays etc), and compare these to your expected retirement income.

Would drawing your pension early increase your overall wealth - i.e. where would you invest it to get a better return (taking tax into account) than leaving it in the pension scheme and taking it at age 65?

GunJack

Get a proper quote from both your old and current pension schemes as to what they'd pay you on a specific date you'd like to stop work, along with what they would pay at normal retirement date(for each scheme, not State pension age, although the LGPS one might be equated to SP age now anyway) and work from there.

xylophone

Have you obtained a new state pension statement to help with planning?

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

Brynsam

GunJack wrote: »

Get a proper quote from both your old and current pension schemes as to what they'd pay you on a specific date you'd like to stop work, along with what they would pay at normal retirement date(for each scheme,

Very sound advice. Just remember that the figures can only be estimates, because the actual figures will depend on inflation rates between now and the time you draw your benefits.

mumsiedebs

Yes I’ve had an estimate of 158 if I work and pay my NI until my retirement age or 138 if I retire early and stop paying in. I was contracted out but have 41 years now

mumsiedebs

The best idea would be for me to be able to retire now but this is really unlikely.
If I cannot afford to retire now would it help if I claimed the deferred pension and had a year or two pension saved and the lump sum?
It’s really hard to know what to do for the best. I’m really struggling to work this all out. Thanks for trying to help me.

xylophone

You had so little time post 2002 in the deferred pension it could make little difference to your benefits?

Could you afford to work part time only if you drew the deferred pension?