Pension penalties

gorka01

Hi
I have a deferred annuity with the Prudential from an old pension  received while working for C&A many years ago. I will be 55 this month so requested a pension statement.  They have told me what I am entitled to if I retire at 55 but will not tell me what the penalty is for taking the pension early as they say this is industry sensitive.  How am I suppose to make an informed decision on whether to take the pension now if I don't know what they are discounting it by?  Are they entitled to keep this information from me.
Thanks

AnotherJoe

I believe you can request a quote for taking it at 65 assuming thats the retirement age baked in.

And usually its pro rated per year so you can work it out yourself then . From what I've read here 5% is a standard figure.

BTW, note that its not really a "penalty" its an adjustment, the idea is to make it neutral up to expected date of death, because obviously you are being paid it for longer. If there was no adjustment then everyone  would take it at age 55 !

And when doing the calculations dont forget to take tax into account if you are currently working.

Albermarle

hey have told me what I am entitled to if I retire at 55 but will not tell me what the penalty is for taking the pension early as they say

Is this an error and you meant to say 65?

gorka01

Hi 
Sorry not an error.  I wasn't very clear.  The full term of the pension is 60 not 65.  I am 55 soon so have had a letter telling me what I will get if I start my pension now but not what it will be if I leave it until I am 60.  I am assuming that the reduced factor is 5% but they will neither confirm that or tell me what I would get at 60.  Is this normal?
thanks

wjr4

They should definitely be able to tell you what it is at age 60. 

Thrugelmir

gorka01 said:

Hi 
Sorry not an error.  I wasn't very clear.  The full term of the pension is 60 not 65.  I am 55 soon so have had a letter telling me what I will get if I start my pension now but not what it will be if I leave it until I am 60.  I am assuming that the reduced factor is 5% but they will neither confirm that or tell me what I would get at 60.  Is this normal?
thanks

Inflationary increases cannot be projected. 

Albermarle

Thrugelmir said:

gorka01 said:

Hi 
Sorry not an error.  I wasn't very clear.  The full term of the pension is 60 not 65.  I am 55 soon so have had a letter telling me what I will get if I start my pension now but not what it will be if I leave it until I am 60.  I am assuming that the reduced factor is 5% but they will neither confirm that or tell me what I would get at 60.  Is this normal?
thanks

Inflationary increases cannot be projected. 

Yes but they should be able to tell him what it would be in todays money , so no need to estimate inflation .

Thrugelmir

Albermarle said:

Thrugelmir said:

gorka01 said:

Hi 
Sorry not an error.  I wasn't very clear.  The full term of the pension is 60 not 65.  I am 55 soon so have had a letter telling me what I will get if I start my pension now but not what it will be if I leave it until I am 60.  I am assuming that the reduced factor is 5% but they will neither confirm that or tell me what I would get at 60.  Is this normal?
thanks

Inflationary increases cannot be projected. 

Yes but they should be able to tell him what it would be in todays money , so no need to estimate inflation .

Though the OP refers to a deferred annuity with the Pru.  Sounds as if individual contracts may have been put in place to buy out the old C&A scheme liabilities. 

xylophone

Is this a S32 policy?

gorka01

Tbh  I'm not sure if it is an S 32 policy.  Would this make a difference to whether they would be able to give me a projection at 60.
With regard to inflation the pension increases by rpi  whether I take it at 55 or not.  I just wanted to do a rough calc on at what age I would start to lose out if I took my pension now.  I am just finding it a bit unbelievable that I have to make that decision without knowing the full picture as this isn't the case with other pensions I have

AnotherJoe

OP, if you work on 5% a year you arent going to be too far off, so just go with that in the absence of a formal quote and the time it will take to get on. But dont forget to include the tax if you will, for sake of argument retire age 60 and wont have any other pensions between 60 and SP age of?66