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Taking CS Classic Pension 1 Year Early
Fred581
Posts: 6 Forumite
I am a deferred member of the CS Classic scheme, age 58, not working and currently living off savings.
I am looking into the option of taking my pension 1 year early at age 59 which will be in late April 2023. This will equate to a pension of approx. £24k including the CPI increase & taking into account the reduction for early payment. This will adequately cover my current living costs.
By my calculations the approx. breakeven age would be:
Inflation not taken into account - age 76
Incl. inflation of 3% pa - age 73
If I also consider the additional £24k of savings that would be used if I waited until NRA at 60 then the breakeven age would be:
Inflation not taken into account - 93
Incl. inflation of 3% pa - age 83
I am aware that the rate of inflation is the unknown and this will alter my calculations but just wanted to check that I have not missed any obvious downsides and to get forum members opinions as to whether or not it is a good idea to take it a year early at age 59 or to wait until NRA at age 60.
I am looking into the option of taking my pension 1 year early at age 59 which will be in late April 2023. This will equate to a pension of approx. £24k including the CPI increase & taking into account the reduction for early payment. This will adequately cover my current living costs.
By my calculations the approx. breakeven age would be:
Inflation not taken into account - age 76
Incl. inflation of 3% pa - age 73
If I also consider the additional £24k of savings that would be used if I waited until NRA at 60 then the breakeven age would be:
Inflation not taken into account - 93
Incl. inflation of 3% pa - age 83
I am aware that the rate of inflation is the unknown and this will alter my calculations but just wanted to check that I have not missed any obvious downsides and to get forum members opinions as to whether or not it is a good idea to take it a year early at age 59 or to wait until NRA at age 60.
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Comments
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Your calculations appear sensible. You have recognised that it is not a penalty for an early start - you are just spreading the money out differently. So, if taking the pension early helps to meet your needs now, and doesn't compromise your ability to meet your needs in later life, go ahead.
You are taking the pension after the next inflation increase. That means you incorporate this year's high inflation rate into the calculation of your lump sum. That's a good thing.
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You will also use your tax allowance for another year.1
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I did this in March 2020. No regrets. Move on!Secret2ndAccount said:Your calculations appear sensible. You have recognised that it is not a penalty for an early start - you are just spreading the money out differently. So, if taking the pension early helps to meet your needs now, and doesn't compromise your ability to meet your needs in later life, go ahead.
You are taking the pension after the next inflation increase. That means you incorporate this year's high inflation rate into the calculation of your lump sum. That's a good thing.0
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