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Final Salary Pension query

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I have a preserved benefit pension from Barclays Bank and my normal retirement date is next January, so just under 6 months. Today I've run a quote on the Towers Watson portal for my pension date and was surprised to see that the figures aren't much different to early retirement figures I obtained previously. So I ran another quote for early retirement in 2 weeks time and it is showing a larger lump sum (only £200) and a slightly larger pension which seems a little strange Is it likely to be possible that I can draw my pension almost 6 months early and be better off than if I wait for NRD, not only in the amount I get but also the fact that I'll be receiving it for 5.5 months longer?
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  • BrynsamBrynsam Forumite
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    roseview said:
    I have a preserved benefit pension from Barclays Bank and my normal retirement date is next January, so just under 6 months. Today I've run a quote on the Towers Watson portal for my pension date and was surprised to see that the figures aren't much different to early retirement figures I obtained previously. So I ran another quote for early retirement in 2 weeks time and it is showing a larger lump sum (only £200) and a slightly larger pension which seems a little strange Is it likely to be possible that I can draw my pension almost 6 months early and be better off than if I wait for NRD, not only in the amount I get but also the fact that I'll be receiving it for 5.5 months longer?
    Sounds improbable but without knowing the basis for the portal calculations (the assumed rate of inflation, the factor used to convert pension to lump sum) it would be daft to try and give a reply which claims to be authoritative. I'd get in touch with Towers Watson and ask them to confirm. You never know, they might be grateful to you for pointing out a hitch on the portal if that's what it is!
  • zagfleszagfles Forumite
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    When did you leave Barclays?
    Try a quote for 30 December this year, then January 2. You might notice it drops significantly between these dates. It's due to the statutory way deferred DB schemes are indexed.
  • roseviewroseview Forumite
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    I left in 2005. I have done a quote for end of December and that certainly does show an even bigger pension/lump sum, although not enough to be a better option than taking the pension as quoted for two weeks time since I'd have it for 5 months longer. I have phoned Tower Watson and they are looking into it. I will await further clarification.
  • edited 13 July at 1:00PM
    zagfleszagfles Forumite
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    edited 13 July at 1:00PM
    You'll probably find there's about a 2.7% difference between late Dec and early Jan, on the excess above GMP. This is because the inflation rate in 2005 was 2.7%. This will get replaced by this Sept's CPI at the turn of the year so if that is lower (likely) the pension will go down. They can't give you an accurate quote for Jan yet as they don't know what Sept inflation will be, they're probably assuming 0. See https://forums.moneysavingexpert.com/discussion/comment/77059312#Comment_77059312


  • roseviewroseview Forumite
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    So does that mean that the January figure will potentially be higher than what the quote system shows currently?
  • zagfleszagfles Forumite
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    roseview said:
    So does that mean that the January figure will potentially be higher than what the quote system shows currently?
    Depends what assumption they use about it in their modeller. But unless inflation takes a rise in the next few months, the pension is likely to drop in Jan if they use statutory revaluation.

  • edited 13 July at 7:57PM
    roseviewroseview Forumite
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    edited 13 July at 7:57PM
    Now I am confused! Any chance of having details in layman's terms?
  • zagfleszagfles Forumite
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    What terms don't you understand? I presume "statutory revaluation"? That's government rules on how deferred pensions need to be increased. More information in the links above and below - but the bottom line is that it is possible for a deferred pension to drop at the turn of the year, because the period over which inflation is measured changes. I don't know any specific about the Barclays scheme or how the Towers Watson modeller works, so you'd need to ask them about that.
    Statutory revaluation looks at the inflation rate for the whole number of years (part years ignored) between when you left and when you start taking the pension. So say you left mid 2005. That's 15 whole years whether you take the pension in Dec 2020 or Jan 2021. OK? But it uses the inflation figures from Sept of the previous 15 calendar years.
    So in 2020 it uses inflation figures from Sept 2005 to Sept 2019 inclusive. In 2021 it will use Sept 2006 to Sept 2020 instead, same number of years but a different period. So at the turn of the year, you lose 2005 inflation and gain 2020. That means that if 2005 inflation was higher than 2020, which looks likely in the current climate, then the pension will drop. If 2020 ends up being higher than 2005, then it would rise.
    Sorry if I've confused you further!

  • xylophonexylophone Forumite
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    Sounds improbable

    https://forums.moneysavingexpert.com/discussion/4736856/barclays-final-salary-pension-gmp-excess-revaluation-anti-franking/p1

    I'm six months away from my NRD (3 Feb 2014), having left my employer (final salary scheme, opted out of Serps - Barclays) on 31 Dec 1994 after 21 years and some months.

    I had been tracking my likely pension via their web-site illustration system - whilst figuring out what to do at NRD.

    Now I get their written illustration and the headline figure (i.e.. pension with no TFLS) is £11,025 (let's call this "A"). This is very different to the £14,209 (let's call this "B") I was led to expect by their illustration system.

    I've spoken to them and the difference is as follows:

    A is taken from an illustration titled "Normal retirement statement on 3 Feb 2014, whereas,

    B is taken from an illustration titled "Early retirement statement on 31 Jan 2014, i.e. 3 days earlier.


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