take or delay deferred pension

steveh6874

Hi i have a small deferred money purchase pension payable at 65 ,,  would it be worthwhile  to delay taking the pension until my state pension retirement age of 67 the scheme does allow this 
i am 55 and the pension currently increases at 7% a year
thank you 

coyrls

Looks like you've got 10 years to decide.  I would think about it as part of your retirement planning once you have decided at what age you wish to retire.

Albermarle

i am 55 and the pension currently increases at 7% a year

Normally with a standard money purchase pension , there is no guaranteed increase each year. It entirely depends on what investment funds are used and how financial markets perform . This year most pensions will have seen a drop of 10 to 20% so far due to the virus issue .

Where does this 7% figure come from ?

xylophone

Where does this 7% figure come from ?

The GMP element? https://www.barnett-waddingham.co.uk/comment-insight/blog/what-is-a-gmp/

 For Leavers after 5 April 1993 but before 6 April 1997, GMP increase  ( Fixed Rate) is 7% up to age 65.

The OP could check whether the scheme pays any "late retirement increases" if he takes it after  Scheme  Normal Retirement Age. Not all schemes do.

Linton

Mickey666 said:

This is an impossible question to answer really as so much depends on the personal outlook of the OP.  Personally, after having lost two close friends who died fairly suddenly in their early 50s, I’m in favour of living for today rather than saving for some possibly mythical future.  That’s not to say there is no room for prudence but our 50s are the time when health issues can fear their ugly heads and throw a big spanner in the best laid plans.  Even if, hopefully, we enjoy reasonable health into our 60s and 70s, it’s likely we’ll have less energy and inclination to do the sorts of things we can more easily do in our 50s.  I’d much rather be well funded in my 50/60s and be prepared to pull my belt in in my 70/80s than the other way around.  But, as I said, these are very personal choices, which makes the OP’s question almost impossible to answer, as posed.

As someone in his 70's I would take a very different view. I have plenty of energy to do the expensive things that I did not have time for in my 50's.  Many people remain active and healthy into their 80's. Although experience of loss of friends may shake you, check the statistics.  Someone aged 40 now is more likely to live into their 90's than die before 70.

Look at things another way.  If you save to achieve a retirement on at least the standard of living you enjoy now and die early leaving a large estate, you are dead and wont be in a position to regret your choice.  If you live into your 90s on minimal income having spent all your money 20 years earlier you could spend every day cursing your foolishness.

Albermarle

Mickey666 said:

Like I said, much depends on personal outlook.

You are right of course but we see on the forum regularly that people significantly underestimate how long they will probably live and ( wrongly) assume that nearly everyone over 80 is in a care home .