Pension advice please

squashabe

Hello, can anyone help? I’m 62 and worked for the council for nearly 27 years. I’ve looked at my work pension forecast and my official retirement age is 66, same time I get my state pension which will be £8575/year. My work pension forecast at Nov 19 is £12935 (age 63), Nov 20 £13709(age 64),Nov 21 £14529(age 65) and Nov 22 £15615(age 66). My current salary is £34000 and I have the chance to go part time(2.5 days/week). So if I take my work pension at 63 my income would be slightly less than it is now for part time hours. My wife works and is not yet ready to retire so we can afford this drop. My thinking is that the sooner I take my pension the more I will get out of it, for example. Say I live until I’m 80 I will have roughly received £219,000, retiring at 63, £219,000 retiring at 64, £217,000 retiring at 65 and £218,000 retiring at 66. My thinking is that the sooner I access my work pension the more I may get out of it. I will also receive a lump sum of £18,000
Thanks
Adrian

Dazed_and_confused

same time I get my state pension which will be £8575/year.

Have you actually checked this and looked at your forecast on gov.uk? It wouldn't be unusual from someone in your situation to not have accrued the full £164.35 without quite a few post April 2016 qualifying years.

Is 80 a sensible age to the comparison against. I think having made it to 62 your life expectancy might be longer than that and as each year passes you are losing an additional £2.7k (pre tax).

AlanP_2

Are those figures adjusted to reflect early retirement factors?

If you can afford it have you considered AVC contributions to boost your tax free lump sum?

Lgps early retirement factors are supposed to be broadly cost neutral for average life expectancy of the member cohort, whether you are Mr or Mrs Average is unknown though.

Personally I would delay taking it if I could just as an insurance against living to 90+.

squashabe

Thanks for the reply. My SP forecast is the full £164.35. My rough calculations show that I would only benefit from taking my pension at 66 if I live beyond 80. I just think that at that age I may not need much income and may benefit from working less hours.

squashabe

Hello and thanks for the reply. I'm new to this so what are AVC contributions?

xylophone

Hello and thanks for the reply. I'm new to this so what are AVC contributions?

https://www.lgpsmember.org/arm/already-member-extra.php

hyubh

squashabe wrote: »

Hello, can anyone help? I’m 62 and worked for the council for nearly 27 years. I’ve looked at my work pension forecast and my official retirement age is 66

Only for pension relating to the CARE scheme (so, membership from April 2014 if you are in England or Wales). A large chunk of your pension will have been unreduced from 60 given the 85 year rule (https://www.lgpsmember.org/more/eightyfive.php).

My thinking is that the sooner I access my work pension the more I may get out of it.

Even more - you're actually negating the benefit of having 85 year rule protections by not taking it. On the other hand, the CARE scheme's generous accrual rate is a big plus for not retiring regardless.

squashabe

Thanks for your reply. I've looked at the 85 rule and I'm confused.
I was born in November 1956 and the rules seem to change depending when you reach the age of 60. I turned 60 in November 2016.
Regards
Adrian