contracted out- options?

mgdavid

mumsiedebs wrote: »

My view is based on how i feel as its so complicated to work it all out.

but presumably by asking on here you realise that with a bit of help the complicated can be made simpler, and hopefully you will come to realise the benefits of the pensions you have, and the possibilities for increasing your SP. But we need your help in providing the details in reply to the questions you've been asked.

mumsiedebs

Apologies for not responding quicker when so much help has been offered if I can answer questions. So lets see if i can provide information you need to be able to answer my initial question. ie is it worth paying extra to increase my state pension and if so what would it cost?
My pension forecast says i will have 41 years paid, 4 years to contribute to April 2022 5 not fully paid( one when i was on mat leave is 2 weeks short the other 4 I was at college full time)this was pre 1980. The estimate at 5th April 2018 is £139.50 and if i work and pay to April 2022 then it should be £158.28.
I still work full time and pay NI as well as my LGPS pension.(since 2003)

I would love to retire now but don't think this is possible as would be on such a small amount . I am seriously thinking of taking my DB pension( 13 years contributions ) from my previous employer so i can save to retire early.

dunstonh

I feel the pressure to take the private pension- with the advice that it saved more into it due to not paying as much NI is as bad as PPI mis selling.

It sounds from what you are saying that you actually had a defined benefit occupational pension and therefore cannot be missold. Joining it was probably one of the best financial decisions you made.

molerat

mumsiedebs wrote: »

is it worth paying extra to increase my state pension and if so what would it cost?
My pension forecast says i will have 41 years paid, 4 years to contribute to April 2022 5 not fully paid( one when i was on mat leave is 2 weeks short the other 4 I was at college full time)this was pre 1980. The estimate at 5th April 2018 is £139.50 and if i work and pay to April 2022 then it should be £158.28.
I still work full time and pay NI as well as my LGPS pension.(since 2003)

Unless you have post 2016 gaps you do not have any scope to pay extra to increase the state pension, you can only increase it going forward to the £158.28 quoted.

LHW99

Your old DB pension will be being revalued with inflation since you left.
What is its normal retirement age - 60?
Sometimes you can get a higher pension by working (not drawing it) after that, sometimes you can exchange some of the lump sum to increase the pension. It depends on the scheme.
You would definately get a cut in benefits if you took it early though.

mumsiedebs

Thanks for clarifying I cannot pay anything to get more state pension due to contracting out.

60 is normal retirement age for my pre 2002 pension contributions and for the last year(2002/3) it is 65 and they have advised I will get a little extra for every year I leave it in after 60 and a little less for the final year of my paying in. In my mind may as well take this pension now.
I have worked out that it would take over 15 years to break even with taking the lump sum amount now.(is this all tax free?)This could help me retire early and live off my small pensions until my SPA.

xylophone

Do you wish to retire early from your current job now (or at the end of this tax year)?

You would take the deferred pension with a small actuarial reduction for the post 2002 year?

Do you have any pre/post 88 GMP in the deferred pension?

Is the deferred pension in a private or a public service scheme?

You would take an actuarial reduction on the LGPS pension?

You would then propose making voluntary contributions from your pension to bring the state pension to the maximum you can achieve?

What does your deferred pension offer if you take the pension early in the new tax year?

And the LGPS pension?

mumsiedebs

I don't think I would be able to retire in the next year unless I win the lottery.
I have pension forecasts for both pensions for if I was able to leave now.
My first pension is not a local government one but a social sector one so i couldn't transfer over but it was final salary to 2002.
It is still forecast to be more than the LGPS. if i take the deferred pension now its about £10k without any lump sum or payments for a partner. LGPS much lower.

xylophone

When you say "social sector" do you mean public sector?

Have you been offered a lump sum and reduced pension?

Are you saying that the pension does not offer spouse benefits after your death?

If you take the pension while still earning a salary, will the income push you into 40% tax?

mumsiedebs

My shps pension is not public sector.
Both have offered lump sums and reduced pensions.
My shps pension offers a choice of enhanced pension if i give up my survivors pension. LGPS does not offer a survivor pension.
If i take Shps i will not be on the higher rate tax allowance as both my salary and pension would be below £46k.