56 year old subject to penalties for accessing pensions

xylophone

This pension closed years ago.

Do you mean the Royal Mail pension he is trying to access?

Having checked out the link in post 2 on this thread, can you explain further?

custardy

xylophone wrote: »

Do you mean the Royal Mail pension he is trying to access?

Having checked out the link in post 2 on this thread, can you explain further?

The FS scheme closed years ago. (2008 IIRC)
Then became career average (or contribution for non FS members)
Now all staff on RM defined benefit scheme.

ermine

custardy wrote: »

The FS scheme closed years ago. (2008 IIRC)
Then became career average (or contribution for non FS members)
Now all staff on RM defined benefit scheme.

Surely you mean defined contribution? defined benefit is a FS or CARE scheme where the benefit is defined in terms of service and pay

custardy

ermine wrote: »

Surely you mean defined contribution? defined benefit is a FS or CARE scheme where the benefit is defined in terms of service and pay

Yeah,sorry. Getting my terms confused

Havent_got_a_clue

Hi
Are you sure it is reduced by 5% from age 65?
I am a deferred member of the final salary scheme that closed in 2008 and the normal retirement age is 60. I know someone who took the pension early at age 55 and retired at the same time. Their reduction was 25% which is of course 5% for every year from 55 to 60 (not 65)

Maybe they have changed the rules since then but I would double check it.
The normal retirement age for the scheme that followed the closure of the DB in 2008 is 65 so that will affect your husbands figures, but I am sure he can take the 2008 separately.
Have you contacted Capita? They are the new administrators.

xylophone

The FS scheme closed years ago

But wasn't that just to new members? The OP seems to be saying that her husband has been employed by RM for the past 31 years.

custardy

xylophone wrote: »

But wasn't that just to new members? The OP seems to be saying that her husband has been employed by RM for the past 31 years.

No,they closed the scheme entirely.

Xbigman

Just how poor is your husband's health? If he has to stop work and has taken a pension the income from the pension will pretty much kill his access to benefits. It might not matter but it's worth thinking about.




Darren

Wiltsmum

Thank you all. There are 2 pensions. One from 1988-2008 and another from 2008-2018. He was given an illustration last year showing what he could expect at 65 after 30 years service. He has already done 30 years service so he thought this was what he would get even if he took it early. I was not involved at this stage. When he asked for a pension projection it came back with the penalties and all hell broke loose. He is not in the best of health (14 hour days for 30 years doesn't help) and will retire when I reach 55 in less than 2 years. I have a large private pension. We will be comfortable in our retirement. We will be able to pay off our mortgage with my draw down but are funding a house move and wanted to do it without incurring a massive tax bill. It appears the penalties are in two stages those on 60 and 65. The issue for us is that Royal Mail doesn't clearly show what they are knocking off for early payment. I would have thought it was reasonable to answer this question and they do not. You are left to work it out yourself and if you query it you have to wait another 8 weeks for them to reply. The whole process has taken us 11 months so far and many sleepless nights. My husband was advised by a IFA that a private pension would not incur the penalties (apparently incorrect) and that there were better returns to be had and a larger spousal pension should he predecease me. This advice has many variables and we have decided to take the Royal Mail pension offer but reinvest it. Our objective was to take the tax free element which we will do. Thank you all once again.

BoGoF

Please stop calling them penalties - a reduction for taking a pension early is not a penalty.