LGPS and retirement date

Knowhere

Hi,

I've been in the LGPS for many years and think I understand it fairly well, but still finding a lot to learn!

Pulling together info I've gained from this forum, am I right in thinking that the CPI increase is applied on the first Monday after 5th April of each year?

Therefore, if considering retirement in the next say 3 years or so, to make the most of the increase your last official working day should be either...

Monday 10th April 2023, Monday 8th April 2024, Monday 7th April 2025 etc ?

That being correct, it would seem to make sense to put it together with a tip from 'Teaandscones' in this post https://forums.moneysavingexpert.com/discussion/comment/65606021/#Comment_65606021

to use leave on that Monday and actually pack in on the Friday?

(minor point, with my employer at least, I guess as it would be taking leave at the start of a new leave year, you would be reliant on them allowing a carry-forward of at least 1 day from the previous leave year - but it would be rather harsh if they didn't!)

I did also read a suggestion that a retirement date just before 6th April may be a good idea, to allow two chunks of the tax-free lump sum to be moved into an ISA either side the new tax year, but can't see how that would be compatible with the dates above, surely waiting for the increase is better (unless I'm missing something!).

Would welcome comments on the above

Thanks in advance

AlanP_2

The CPI increase will be applied to your previously accrued CARE benefits irrespective of when you leave won't it?

If you leave 31st March 2023 then CARE accrued up to April 22 will be increased by CPI and paid to you upon retirement.

If you retire on 8th April 2023 the same CARE benefits will be upgraded by CPI. 

You won't get a CPI uplift on the 22 / 23 accrual until April 24.

MX5huggy

It’s all worked out to the day you won’t get 10% CPI extra buy retiring 1 day different. With the CARE section it makes no difference because you get CPI before retirement and after. With the Final Salary you might be better retiring because you salary might go up 2% per year (while your pension in payment will go up by CPI. 

Knowhere

Thanks for the replies so far.  Yes, agreed, as for the actual pension it won't make any difference I suppose.

But for the lump sum, surely taking AFTER the CPI increase could make a fairly significant difference ?

soontobe55

Knowhere said:

Thanks for the replies so far.  Yes, agreed, as for the actual pension it won't make any difference I suppose.

But for the lump sum, surely taking AFTER the CPI increase could make a fairly significant difference ?

I was about to post this very question myself. I am in the TPS final salary scheme (which I believe is very similar to the LGPS) and had planned to take early retirement mid-March next year, when I will be 55. I too am assuming that if I delay it until after 10th April my lump sum would be around 10% larger (depending on CPI) than if I took it in March. Is that right? Is that the lines you are thinking along too?

AlanP_2

Why would lump sums be larger? 

Unless you are a deferred member you aren't getting CPI increases to a final salary pension, only to previously accrued CARE benefits. 

Silvertabby

Alan is right.  To get the 10% (?) CPI increase on the lump sum and all of the pension next April, you will have to have left and deferred your pension by 31 March this year.

If you retire and take your benefits straight away, after the first of April, then only your CARE pension will be revalued by CPI.

Shabbycat

I’m now asking about my own Classic pension this time. 
Due to Covid,  my best 12 months pensionable earnings were from 1/6/20 to 31/5/21.  I intend to resign this year at the end of November. I will use my SIPP and savings to bridge the gap til I take my pension unreduced at 60 in May 26.
Does my pensionable pay get reevaluated from May 21 til I resign?? Will it then go up with CPI while it’s deferred?? Do I get a pro rated portion of CPI added next year?? 

Thanks

soontobe55

Silvertabby said:

Alan is right.  To get the 10% (?) CPI increase on the lump sum and all of the pension next April, you will have to have left and deferred your pension by 31 March this year.

If you retire and take your benefits straight away, after the first of April, then only your CARE pension will be revalued by CPI.

Ah, I should have have stated in my original post - I have already left (well before March of this year) and my pension is deferred. Next March is the date from which I could take it, hence me working out that I might be better off to wait an ectra 3-4 weeks.