DB pension - should I take it?

Sanbrimm

I have a deferred DB pension which I can take at 60 in a couple of months. I still work, higher rate tax payer no plans to retire yet. Have a small DC pension £4K pa. State pension at 67.   DB will pay £43k lump sum £6500 pa. Or £8k with no lump sum ( sorry don’t know the correct term for lump sum).  So should I take the DB now? I know I will pay 40% tax on the £6500 or £8000 whichever I take but will I lose out by not taking it? Or is it better to take it now?  Do I need to asks for an illustration of what I would get when I do retire in say 5 years?  Thanks for any advice. 

xylophone

Is there a guide to your scheme available on the internet?

Dazed_and_C0nfused

Is 60 the normal pension age for this scheme?

If it is then will you simply lose any pension you choose not to take?

sheslookinhot

If the DB scheme has an Normal Retiral Age of 60, then best to take it. If there is an actuarial reduction between 60 and NRA, then possibly not. 

hyubh

sheslookinhot said:

If the DB scheme has an Normal Retiral Age of 60, then best to take it. If there is an actuarial reduction between 60 and NRA, then possibly not. 

By the same token, if there is actuarial increase for retiring after 60, then possibly not best to take it, especially if you'll only be paying more higher rate tax on it now than if it was kept deferred and drawn later.

xylophone

If the OP can point to an internet Guide that we could read, it  would help to make better informed comments.

Otherwise, is age 60 Normal Retirement Age for the scheme?

Does it pay late retirement increases?

Did membership of the scheme begin between 1988 and 1997?

Did it continue after 1997?

Is the OP male or female?

Does the pension relate to a Public Service Scheme?

Does the OP still have a statement of benefits on leaving and if so what does it show?

Is the OP still contributing to a pension scheme?

Has the OP obtained a state pension forecast?

Is a COPE shown?
https://www.gov.uk/check-state-pension

Sanbrimm

Thanks everyone for comments. 

Xylophone:

I do have a Members Booklet but it’s not on internet. 

NRA Is 60
Booklet says: “ late payment increases larger the longer after 60 you retire the factors used to increase your pension are subject to review and may change from time to time” I have now asked administrators for illustration
Membership was June 1999 to 31 Jan 2010 when scheme closed. 

I’m female
Not public service
i still work for the company and get statements annually.
Scheme is closed 
State pension forecast is £9141.69 pa
There is a Cope £51.88 per week. Not even sure what that is 

mark55man

don't worry about cope it was a moment in time factor relating to the changes in 2016 that doesn't affect what you get

Was the £9141 the maximum amount you could get (if you carried on paying in) , or the actual amount you will get.  It looks like the maximum you could get as its £175*52.  There is a second number under that showing your current prediction - if its the same then you are sorted..

Sanbrimm

mark55man said:

don't worry about cope it was a moment in time factor relating to the changes in 2016 that doesn't affect what you get

Was the £9141 the maximum amount you could get (if you carried on paying in) , or the actual amount you will get.  It looks like the maximum you could get as its £175*52.  There is a second number under that showing your current prediction - if its the same then you are sorted..

That’s the maximum I think. Weekly amount says £175.20. 

xylophone

There is a Cope £51.88 per week. Not even sure what that is

See
 https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

It was used once only in calculating your "starting amount" for the new state pension.

With regard to your state pension forecast,  presumably it said  £175.80 is the most you can get. You cannot improve your forecast any more?

This means that although you will still need to pay NI up to SPA, this will not  add to your state pension.
It will however be  revalued each year to preserve its purchasing power, £175.20 of it under the Triple Lock System and the balance by CPI.


As Scheme NRA is 60, you will be able  (if you choose) to draw your deferred pension (which has been revaluing in deferment) without actuarial reduction when you reach age 60.

Your particular scheme offers you "late payment increases" if you choose not to draw your pension at scheme NRA. 

You are a higher rate tax payer.  Do you expect to be a basic rate tax payer once you stop work?

If so, you might take the view that  it would suit you not to draw the scheme pension until you fully retire?

Sanbrimm

I will be a basic rate tax payer when I retire. What I’m not sure about is if I will be worse off by not taking it at 60. Am I “loosing” the years I don’t take it.