Is there any benefit in taking my civil service pension early ?

Andy2023

I left the civil service in 2015 after completing 7 years' service, my civil service "premium" pension is set to mature when i am 60.
I am now considering collecting it a year early at the age of 59. despite the fact that i will lose 5% "for each year it is collected before it matures "

I believe that due to the current inflation rate and the predicted 10% increase to the pension forecast in 2023 i may benefit from doing so, is that right? " Would i benefit from collecting it April 2023 - i am aware i would lose 5% for taking it early but benefit 10% due to the triple lock Guarantee on my civil service pension?

i would be grateful for advice on this subject.

JoeCrystal

Sorry, but what is this triple lock guarantee on your civil service pension you are referring to? There are no such things as far I am aware. What do the rules stay about index linking for your own pension section?

Dazed_and_C0nfused

JoeCrystal said:

Sorry, but what is this triple lock guarantee on your civil service pension you are referring to? There are no such things as far I am aware. What do the rules stay about index linking for your own pension section?

It will almost certainly be the September CPI rate.  But as you rightly say not the triple lock.

https://www.civilservicepensionscheme.org.uk/retired-left-or-leaving/retired-and-receiving-your-pension/yearly-pensions-increase-pi/#:~:text=In September 2021, CPI was,from Monday 11 April 2022.

Andy2023

See attached 

Dazed_and_C0nfused

It's poorly worded.

The double protection is,

1.  Civil service pensions rise by the September CPI rate

2.  State Pension rises according to the triple lock rules.  Which for 2023:24 is likely to be the September 2022 CPI rate.

mjm3346

Andy2023 said:

I left the civil service in 2015 after completing 7 years' service, my civil service "premium" pension is set to mature when i am 60.
I am now considering collecting it a year early at the age of 59. despite the fact that i will lose 5% "for each year it is collected before it matures "

I believe that due to the current inflation rate and the predicted 10% increase to the pension forecast in 2023 i may benefit from doing so, is that right? " Would i benefit from collecting it April 2023 - i am aware i would lose 5% for taking it early but benefit 10% due to the triple lock Guarantee on my civil service pension?

i would be grateful for advice on this subject.

If it's like Classic the rise would be the same regardless of it being in payment or still "preserved"

From the "premium" site

If you have at least two years’ qualifying service we will preserve your pension for payment at the pension age. When you claim your pension, we will pay it with increases in line with the cost of living.

https://www.civilservicepensionscheme.org.uk/knowledge-centre/pension-schemes/premium-scheme-guide/leaving-the-scheme-before-retiring/

Andy2023

I understand that - what I was trying to establish was if there were any benefit in collecting my pension 12 mth early ? I would loose 5% for that privilege but gain 10% due to the increase in pension in April 2023  ?

mjm3346

Andy2023 said:

I understand that - what I was trying to establish was if there were any benefit in collecting my pension 12 mth early ? I would loose 5% for that privilege but gain 10% due to the increase in pension in April 2023  ?

the preserved pension would increase just the same as if it were in payment

Andy2023

Thank you, that’s the information I have been looking for.

kassy64

Only benefit I can see in leaving it until post April next year would be that your lump sum (normally x3) would also benefit from the large CPI increase, otherwise the one off lump sum, will be paid now.

michaels

Taking a CS pension early is actuarially fair - the average payout is the same, just less money times more years.

However any pension you get over the age of 67 is likely to be taxed whereas before that age if you have unused personal allowance then the pension you take will use some of it up.  So all things being equal, best to take it as early as possible as the overall amount you get after tax will be higher.