Deferred pension increases

Pat38493

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

You can also do that but do you need to?  If you do that you will be paying tax at your marginal rate on the DB income.  You could also take tax free cash out of your DC fund instead to pay your gas bill if you are desperate  

eastcorkram

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

You can also do that but do you need to?  If you do that you will be paying tax at your marginal rate on the DB income.  You could also take tax free cash out of your DC fund instead to pay your gas bill if you are desperate  

I'll be paying tax on the DB income whether I take it now or at 65

Pat38493

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

You can also do that but do you need to?  If you do that you will be paying tax at your marginal rate on the DB income.  You could also take tax free cash out of your DC fund instead to pay your gas bill if you are desperate  

I'll be paying tax on the DB income whether I take it now or at 65

Do you have to take it at 65?  Often with DB schemes, if you are still working and you don't need the money, you can defer it beyond the normal NRA and you will end up getting an increase similar to the reduction discussed above - as mentioned above the idea is that you would receive roughly the same amount of money in the end if you live to average age.  If you are planning to carry on working and you don't need the money, it's not usually tax efficient to draw pension money.  Depends on the rules of your scheme I guess if you are obliged to take your DB at 65.  

eastcorkram

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

You can also do that but do you need to?  If you do that you will be paying tax at your marginal rate on the DB income.  You could also take tax free cash out of your DC fund instead to pay your gas bill if you are desperate  

I'll be paying tax on the DB income whether I take it now or at 65

Do you have to take it at 65?  Often with DB schemes, if you are still working and you don't need the money, you can defer it beyond the normal NRA and you will end up getting an increase similar to the reduction discussed above - as mentioned above the idea is that you would receive roughly the same amount of money in the end if you live to average age.  If you are planning to carry on working and you don't need the money, it's not usually tax efficient to draw pension money.  Depends on the rules of your scheme I guess if you are obliged to take your DB at 65.  

No, it doesn't have to be taken at 65.
The earliest was 55. NRA is 65. They sent me a chart of the deductions when taken early, from 55 , and in three month steps. Then from 65 onwards, the increases , also in three month steps.
I've no plans for retirement, basically because, I've no plans for retirement, but that'd be a whole nother thread! So I think whenever it's taken, it'll be taxed anyway. 

Qyburn

Are you paying higher rate tax at the moment?

Linton

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

Perhaps I have missed it but as far as I can see the screenshot only tralks about pension increases up to the NRD. It doesnt mention what happens afterwards.

eastcorkram

Linton said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

Pat38493 said:

eastcorkram said:

I miss read the part about the deduction.
At 63, it's 92%.

So leave it till 65, looks like I'd get an extra £200 a year.

Taken now, and by the time I'm 65, they'll have paid me £5000 before tax.

So if I leave it, it'll take well over 20 years to make up for what I would miss out on?

However, I guess the question is, what makes you think that you will be better off in the long run by taking your DB pension while still working and putting the equivalent sum into your DC pension?  This will depend how your DC pensions is invested and also on the above point around what kind of guaranteed increases your DB amount has during retirement.

I will try and get some up to date figures. That paperwork was from2020.

I'm not saying that I'd be better off taking it now. I don't yet know my date of death. 

You appear to think it's better left till 65, though I guess if everything went to averages, there's probably very little in it either way.

To be honest, as it's run by Willis Towers Watson, if I actually applied for it now, they'd probably just about get around to paying it in two years time. 

Do you know what are the increases on the excess (non GMP) part of your DB pension after it's in payment?

Ok. How about instead of increasing my current DC contribution (yes I know it's only the employer making the contribution), I use the db pension for the gas and electric for the next two years?

The only info I have about increases once in payment, is in the screenshot I posted earlier. 

Perhaps I have missed it but as far as I can see the screenshot only tralks about pension increases up to the NRD. It doesnt mention what happens afterwards.

That's what I thought too. That's all it says about increases once in payment. Which doesn't seem very good if I was being paid it for 10, 20, or 30 years.
I'll ask for more info. 

eastcorkram

Qyburn said:

Are you paying higher rate tax at the moment?

No. I use salary sacrifice to avoid it.