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

Scrounger

kassy64 said:

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.

And if you leave it a further year, until post April 2024, you could well benefit from two CPI increases to the said lump sum. 

Scrounger

drummersdale

kassy64 said:

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.

How would the lump sum benefit as I thought the lump sum was based on your salary whereas the CPI uplift was applied to the pension - so how does it impact on the size of the lump sum?

kassy64

The lump sum is given as 3 x your annual pensionable pay. So if your pension is £15k per year your automatic lump sum will be £45k. If you were to wait until after next April then your pension would increase to for example £16.5k and your lump sum would also increase to £49.5k. Whereas, if taken now only the pension would increase by CPI next year. This is how it works in Classic/Alpha pension in civil service dept. I was in. 

Scrounger

Nicely explained @kassy64.

I imagine many ex-classic members deferring until 11 April 23 (myself included).


Scrounger

kassy64

Scrounger said:

Nicely explained @kassy64.

I imagine many ex-classic members deferring until 11 April 23 (myself included).


Scrounger

All depends on individual circumstances I suppose, for example anyone still working means they will need to work for another 8 months or so, if a deferred Classic member already retired or not working in Civil service, then by holding on they are missing out on 8 months pension payments which could be more than the additional lump sum accrued by waiting, but would lose less in actuarially reduction. Time to get your calculators out I reckon.

Scrounger

So if your (60th) birthday happens to fall in April then you're quids in.

Scrounger

kassy64

Scrounger said:

So if your (60th) birthday happens to fall in April then you're quids in.

Scrounger

Yes probably, however I’ve left early at 58  and taking my pensions (classic/alpha) actuarilly reduced as I didn’t fancy working anymore and happen to be in a strong financial position. Looking back now with the cost of living crisis energy etc I may have delayed for another year if I’d had a crystal ball. But happy I’m not working anymore (shifts as well were a killer) and won’t dwell on what I could have had if I’d worked longer or deferred until a later date. 

Turned_out_nice.

I have been deferred for 3.5 years after 38.5 years (started as a lad of 16).
60 at very beginning of April 2024 so it seems that the 9th will be the date I will take mine and yes I know I am fortunate but several times no pay rises and for several years our pay was reduced as moved from DoE to MoD and they wouldn't pay some enhancements so not always rosey but obviously I stayed and hopefully will get the benefit. Also hope that the McCloud judgement is done and dusted at last by then, I know it should be.

kassy64

I was informed recently that it won’t be anytime BEFORE October 2023, plus however long it takes to get the appropriate statements ready and based on my experiences so far with Mycsp, it may be a while. Took me 45 mins to get through last time I called. I suspect late 2023 or early 2024, but that’s just my best guess. 

Scrounger

Turned_out_nice. said:

I have been deferred for 3.5 years after 38.5 years (started as a lad of 16).
60 at very beginning of April 2024 so it seems that the 9th will be the date I will take mine....

If you take it on 9th you'll be a day early for the April rise!

Scrounger