How much to live on

hugheskevi

drummersdale said:

I am now in what I hope is my partial retirement year - I am looking to go part time from around August 22 as my last salary increase was 1st August 2021 so I think I need to work 12 months from that date to get my best Final Salary figure. 

Assuming your pensionable earnings have not reduced at any point in the last 3 years, that is correct. Although if the increase was small it will make little difference if you were to commence your pension before then.

I will have worked approximately 40 and 10 months in the Civil Service by then so am currently trying to get my head around what figure I might get (I will be aged 59 and 6 months by then) and how best to avoid abatement.  I was looking to work 2.5-3 days (as you need to reduce your salary by at least 20% - so that would be 40-50%) so my rough numbers are based on salary of £52,300 divided by 80 / 38 yrs 211 days (so say 38.5) gives £25,169 minus say 3% for finishing before 60 gives £24,414 plus whatever the Alpha element might be for the other 2 years.  Let's say it would be about £25,000 combined.  

Once McCloud is resolved, you will either have Classic service between 2015-22 or alpha service between 2015-22. You will not keep what you currently have.

Depending on which option you choose, that will affect how much of your pension is subject to abatement, as abatement only applies to classic (it does not apply to alpha).

You could also choose to buy-out the actuarial reduction to the pension, which would benefit from tax relief in the usual way.

So if I dropped down to 2.5 days a week is it simply £52300 divided by 2 = £26150 salary element plus £25,000 pension gives £51,150 so I would avoid abatement - is that how it works?

Yes, although the McCloud changes will retrospectively alter the position.

drummersdale

hugheskevi said:

drummersdale said:

I am now in what I hope is my partial retirement year - I am looking to go part time from around August 22 as my last salary increase was 1st August 2021 so I think I need to work 12 months from that date to get my best Final Salary figure. 

Assuming your pensionable earnings have not reduced at any point in the last 3 years, that is correct. Although if the increase was small it will make little difference if you were to commence your pension before then. Pensionable earnings haven't reduced in the last 3 years - increase in salary from August 21 equates to around £1,300 per annum

I will have worked approximately 40 and 10 months in the Civil Service by then so am currently trying to get my head around what figure I might get (I will be aged 59 and 6 months by then) and how best to avoid abatement.  I was looking to work 2.5-3 days (as you need to reduce your salary by at least 20% - so that would be 40-50%) so my rough numbers are based on salary of £52,300 divided by 80 / 38 yrs 211 days (so say 38.5) gives £25,169 minus say 3% for finishing before 60 gives £24,414 plus whatever the Alpha element might be for the other 2 years.  Let's say it would be about £25,000 combined.  

Once McCloud is resolved, you will either have Classic service between 2015-22 or alpha service between 2015-22. You will not keep what you currently have.  Yes I understand that - there is no way of knowing as yet whether Classic or Alpha would be the better option for the 7 years as details of the remedy haven't been determined as yet.  I will just need to make a judgement when known.

Depending on which option you choose, that will affect how much of your pension is subject to abatement, as abatement only applies to classic (it does not apply to alpha). I didn't realise abatement only applied to Classic, thanks.

You could also choose to buy-out the actuarial reduction to the pension, which would benefit from tax relief in the usual way.

So if I dropped down to 2.5 days a week is it simply £52300 divided by 2 = £26150 salary element plus £25,000 pension gives £51,150 so I would avoid abatement - is that how it works?

Yes, although the McCloud changes will retrospectively alter the position.

@hugheskevi much appreciated.

runningromani

Hi @drummersdale hope you are doing ok? Apologies can’t comment on abatement but to confirm (we chatted about this a few weeks ago) I pushed the button last week on early CIvil Service retirement, if the quote matches the pension calculator I hope to be done by Easter. Hope all goes well for you this year, you will have beaten my service by nearly 4 years, impressive ....having now made my decision I can’t wait! 

drummersdale

runningromani said:

Hi @drummersdale hope you are doing ok? Apologies can’t comment on abatement but to confirm (we chatted about this a few weeks ago) I pushed the button last week on early CIvil Service retirement, if the quote matches the pension calculator I hope to be done by Easter. Hope all goes well for you this year, you will have beaten my service by nearly 4 years, impressive ....having now made my decision I can’t wait! 

Hi @runningromani I do recall our exchange but I can't remember if you were going for full or partial retirement?  I am looking for partial as my wife is 5 years younger than me - I was on a My CSP course yesterday where they mentioned the McCloud remedy and it seems we will be none the wiser until 2023 when they will write out to anyone who has recently retired giving options in terms of leaving the 2015-2022 years in Classic (or whichever you have) or Alpha.  I am looking to go down to 2.5 or 3 days from August - just waiting for confirmation from management then I can start thinking about completing the relevant forms - although I think it would be a little early as I am told it takes between 3-4 months.  I hope your quote matches what you are expecting - that's my worry - that I have got some ideas of numbers (annual pension/lump sum) and then they come back with a lot lower numbers!  My wife would be most unhappy as she's already earmarked the lump sum for a new kitchen!  

Good luck!

runningromani

Hi @drummersdale, full retirement for now at least. We’ve had an awful 2 years with family and friends deaths and what has felt like relentless work so we aim to recharge our batteries this summer. We may do a bit of temping in the future but too early to plan, roll on Easter......

drummersdale

runningromani said:

Hi @drummersdale, full retirement for now at least. We’ve had an awful 2 years with family and friends deaths and what has felt like relentless work so we aim to recharge our batteries this summer. We may do a bit of temping in the future but too early to plan, roll on Easter......

Hi @runningromani Yes I understand what you mean and why you are going for full retirement now, I think the last 2 years has made a lot of people reflect on what is and isn’t important - if my wife retired now she would lose almost 25% of her pension hence me going for partial initially.   I really hope it is everything you are hoping for and Easter isn’t that far away when you think about it - my countdown app on the phone tells me I have 210 days before I go partial (fingers crossed) which seems a long time but isn’t!  

MovingForwards

I've finally received my transfer value and eventually managed to find the figure in the mass of papers, it's just under £14.5k.

Using a pension modeller for a similar scheme it could amount to about £1k pa (in today's money) when I reach 68.

I'll admit to being torn about what to do as it would cover 2.4 years of my early retirement, leaving it in the DB means my home / car insurance, MOT and repairs are covered when reaching SPA.

[Deleted User]

A little quiet on here lately. Hope everyone is well. 

I am fine. My 3 day a fortnight teaching contract is going ok. It actually means 4 early mornings as two of the days are part days. (Equal to 3 full) . To be honest not overly enjoying it at the moment. Initial contract is until April with possible extension to July. Maybe I will need to think about that ! 

To be honest a little down at the moment. Apart from work, mainly staying at home apart from trips to the shops and occasional walks. Will be pleased when it warms up a little and I can get back in the garden. I have to test regularly and that’s always been clear so far. 

I do miss the days when you could go out without having to plan so carefully! I need to think of some things I can do rather than convincing myself I’m useless at most of them ! I need the sunshine!
Financially all is well! 

Best wishes

[Deleted User]

Some posters recently with some good DB pensions. Best wishes to them. 

Would be good to hear from more singletons like myself on here. According to surveys there are more of us than ever, yet we seem under represented on here. Maybe we are just better at managing our money

[Deleted User]

If I do decide in April to finally fully retire rather than July ( that will( be 5 years after I first retired  ) I will have pension income of £20000 per annum for 2 years and then from July 2024 state pension kicks in. That looks to be about £9500 at the moment. Hopefully I should be ok.