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lump sum or pension
Comments
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Re GMP - https://www.barnett-waddingham.co.uk/comment-insight/blog/what-is-a-gmp/ Note "GMP in payment" but see
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN04956on pension 2 in a break down some is before 1988 and some before 1997.Pension 2 is HBOS ( Bank of Scotland)
When you left HBOS, were you given a statement of deferred benefits?
It wold have shown pre 88 GMP, post 88 GMP and excess.
You have reached female GMP age (but not State Pension Age).
You might like to check with the administrator what effect this will have on your pension in payment.
That is, from age 60, will the portion of your pension that is pre 88 GMP not increase in payment, will the 88-97 GMP be increased by the scheme by only up to 3% CPI (or possibly RPI) and the balance under scheme rules?
Or will the above only apply once you have reached SPA? (In view of the change to SPA.)
https://www.lloydsbankinggrouppensions.com/assets/scheme_docs/hbosfs/scheme_guide-62d8eb08c36d3531550dd87dc7849863c8dac06743a21a78f05e05c06847d424.pdf0 -
In a recent correspondence from the bank pension they say -
the scheme pension built up pre 1997 will be at least equal to the GMP.
Increases once pension starts to be paid
The scheme will pay increases on the GMP built after 1988 in line with inflation to 3%. After SPA any inflation over 3% will be paid by the government.
The scheme pension built up before 6th April 1997 over GMP will increase by 3% a year.
I know its not vast amounts of pensions compared to what some will get - but in a way the smaller the amounts people receive are more important to get right as it just tops up the SP to a livable amount.
How do you take into account the cost of living rises on the pensions compared to how to invest the lump sums now.
Breaking even in 12/ 20 years is one aspect to look at but I am also worried about what those extra yearly amounts 555 and 688 would be worth then.0 -
From the above, it seems that once your pension is in payment, you will receive no annual increase on that part of your pension relating to pre 88 GMP, up to 3% CPI on the post 88 GMP and a fixed 3% on the excess regardless of the rate of inflation?After SPA any inflation over 3% will be paid by the government.
The old mechanism for this went out with the old state pension.
What exactly does your state pension forecast say? Is there a COPE mentioned?0 -
pension forecast is £168.60 and a message to say you cannot increase this.
On the next page of the gov. forecast
Your COPE estimate is £27.70 a week.
This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.
In most cases the private pension scheme you were contracted out to:
will include an amount equal to the COPE amount
may not individually identify the COPE amount.
So is this the bit that does not get the rate of inflation increase ?
I should have taken more notice at the time - too busy filling skips and renovating houses whilst working. I put all my efforts and money into saving to pay off the mortgage as I thought that would be my "pension". In the old days if you left a job the pension contributions were paid back to you and the pension was cancelled. This pension business has just landed on me I never thought about it before I have been so foolish and its so complicated.0 -
On 6/4/16, two calculations were done.
Old rules
NI years/30 x £119.30 + ( SERPS/S2P - deduction for contracting out)
New rules
(NI years/35 X £155.65) - COPE.
Your foundation (starting) amount was the higher of the two.
It would seem that the old rules gave you the higher amount - either you had already reached a full new state pension or have reached it since after the addition of the three years 16-19.
While working and earning over a certain amount you will continue to pay NI up to state pension age but your SP will only increase under (as far as is known at the moment) the "triple lock" rules.
https://www.moneywise.co.uk/news/2018-10-11%E2%80%8C%E2%80%8C/state-pension-triple-lock-guaranteed-parliament-no-consensus-reforming-pension
However this is the whole of the pension, some of which will be be any additional state pension left after the deductions explained in the calculations as above.
With regard to increases on your HBOS pension, you need to know how your total pension is split.
Ask the administrator how much is pre 88 GMP, how much post 88 GMP and how much is excess.
The pre 88 GMP amount will remain constant.0 -
Do you have the scheme booklet relating to your section of the pension scheme?
Do you have annual statements from the administrator giving the above information?
Did you work for HBOS post 1997?
Will there be any state pension reduction applied to your HBOS pension after you have reached State Pension Age?0 -
Do you have the scheme booklet relating to your section of the pension scheme?
Do you have annual statements from the administrator giving the above information?
No they have only just tracked me down - this is the first paperwork I have from them.
Did you work for HBOS post 1997?
No joined pension in 1981 and left in 1987
( In the old days girls were not allowed to join this pension until they were 21 )
Will there be any state pension reduction applied to your HBOS pension after you have reached State Pension Age?
No just read the small print
when you reach SPA your pension will be reduced by SPReduction :eek:
At your date of retirement your SPR is nil - relief.0 -
No joined pension in 1981 and left in 1987
In which case you have no post 88 GMP.
Therefore your pension will be pre 88 GMP and excess.
This means that the scheme will pay no annual increase on that part of your pension that represents your pre 88 GMP.
From the information previously given, it seems they will pay a fixed 3% increase on the excess.
Do you know the split?
I would suggest that you ring the administrator to check on your situation once the pension comes into payment.
Once you have this information it may help you decide on lump sum/annual pension.
Another thought, it appears that you will be drawing two pensions and a salary - make sure that your tax codes are correct.0 -
And use this increased income to pay higher pension payments, but diverting more of your earned income to pension.0
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