Flexible Retirement in LGPS

bioboybill

Hi,

I was intending to retire at the end of the year, but the cost of living crisis has blown a great hole in my plans, so I am thinking of requesting flexible retirement  and going down to 2 days instead. I will be 60 at the end of October and will have 37 years service in, so I know that my pension up to 2008 will be protected under the 85 rule, but the rest will be reduced for early payment. I assume flexible retirement wouldn't effect that?

My plan would be to take my LGPS pension of about £19K, pension lump sum of about £32K and approximately £38K I have in Prudential AVC scheme, which I could also take completely tax free.

A couple of years ago there was a voluntary severance scheme at work, which I applied for. I was turned down because of the extra pension costs that would have to be born upfront by my employer. If I flexibly retire after 60 will there still be extra costs for my employer that might make them say no?

The other thing I'm unsure about is how NI would be applied to my reduced earnings for the 2 day week post. I understand that my pension would be taxed above the £12570 threshold, but no NI applied. I also assume that all of my new lower earnings at work would be taxed, but would I only pay NI above the first £12570 of work income or the whole lot?

I assume that I would also have to rejoin the LGPS for my new reduced hours post and start to pay pension contributions again? I currently pay at 6.8%, but under my reduced wage I would drop down to 5.8% because my earnings would be just under £16K. Is that right?

TIA for any advice. Of course they might flat out refuse, which means I will just have to keep my nose to the grindstone for another couple of years lol.

Silvertabby

As long as you wait until you are at least 60, then there won't be any compulsory  employer costs to pay.  You would benefit from your R85 protections in respect of your pre 2008 pension, but your post 2008 accruals would be reduced for early payment unless your employer agrees to pick up the financial slack - but hens, teeth and rare (not necessarily in that order) spring to mind.

However, flexi retirement is still subject to your employer's approval.  How likely is it that they will be able to recruit someone to fill the other 3 days?  Or (and I've seen this in the past) will they expect you to carry on doing a full time job in just 2 days?

Dazed_and_C0nfused

Nothing would change NI wise 

You don't pay NI on pension income but your earnings would be subject to NI as normal.  You would pay less and you less income and the threshold where you actually pay NI has recently increased to match the Personal Allowance.

bioboybill

Silvertabby said:

However, flexi retirement is still subject to your employer's approval.  How likely is it that they will be able to recruit someone to fill the other 3 days?  Or (and I've seen this in the past) will they expect you to carry on doing a full time job in just 2 days?

Well there's a strange thing there. My line manager and another senior manager in a similar related area have both been so busy with work related to a new building that's supposed to be completed in September 2023 that HR allowed them both to appoint deputies to take up the slack on a  12 month contract even though they already have deputies (me being one of those!)

So basically there is a guy 2 whole scales below me that got given a 12 month contract to continue in his technician role, but take up slack from my boss and be paid on the scale below me for 12 months. He even has the same title as me now, but gets paid about £7K less. When his 12 months is up I imagine he would be happy to take the 3 days and continue 2 days in his lower scale post, particularly as he knows he would be basically lined up to take over when I eventually go completely. However, sometimes HR are a law unto themselves and if they like you they fall over themselves to help, but if not they just say no.