Very early ill health retirement

baffledandconfused

My work have retired me early because of ill health and I'm a little confused by what is avaliable to me and what I should be doing.

They sent me a pension pack but its all just generalised information, it tells me to get advice from places that only offer appointments/ advice to those over 50. The only part that isn't generalised is the amount for the pot, for which they've given me a savings amount and then an augmentation. I've got over 30 years before I hit 67 so I've been retired incredibly early and I'm not sure if this will limit my options? I'm currently on new esa and UC as well as pip. All I want for the pension is as much money as I can get each month for as long as possible up until retirement age. I'm not interested in it lasting past that and I don't want any lump sum. I know that taking the money in this way will just reduce the amount of UC by the amount I get each month and i won't get any extra money,  I'm happy with this. frankly,  I don't trust the DWP and so would like to rely on them as little as possible. Any money I can get from a pension rather than UC, helps me feel secure that I'm not wholly reliant on their tests and assesments and any future changes in rules.  I was expecting the pension pack to quote me an amount for a monthly pension and then i could choose to stick with them or leave and see if a different company might quote a different amount but it doesn't? They talk about the option of an annuity but they don't say if it would be with them or if i have to find it and they just say 'to be advised seperately' next to monthly on the options sheet.  I don't know if this means i can ask them for a quote or if it's saying 'you'll have to do that yourself'.

They've given me a form to sign away my right to a pension wise appointment but from what i can tell i can't get one anyway as I'm not over 50? I have contacted them to ask and I'm going to try to talk to citizens advice too but honestly i don't know where to start so if anyone's been in this situation or is familiar with it then I'd appreciate any thoughts.

I think I'm going to have to talk to a financial adviser but I've no idea where to start. I'm working class and no-one i know really does 'personal finance' so this is all really new to me. I'm worried that I'll find someone dodgy and they'll over charge me or give me bad advice and i won't realise! I'm also worried they will be more concerned with retaining savings till I'm retirement age than getting the best value each month from this pot over the next few decades. I'm happy living off a state pension if i get to that age (likely will,  I'm not getting better but it's a joint condition so it's unlikely too kill me) most people i know don't have a private pension,  i just paid in to it as i was with a company that would more than match your contributions and it seemed like a good deal. What i know about personal finance is all self taught from the internet and there's hardly anything about retiring this early or how it works so I'm coming up short.

 The scheme was based on what i paid in to it not my salary and ill health was based on being able to do your normal job in gainful employment so as my symptoms are progressive and i won't get better,  there's no real argument that I'll be any more able to work in 5 years than i am now but when they assessed me,  they've granted partial incapacity? It took them 2 years to get to that point so I'm inclined just to go with it for now but they haven't given me any definition of what partial incapacity means at all,  i haven't been able to get them to supply me with anything but a 'trust deed and rules' which gives a few lines saying there is a ill health retirement option,  says its based on your normal job and gainful employment and then says that they may allocate extra amounts to the pension pot 'as directed by [employer]'. There's a bit where they say they retain the option to reassess you at any point but that's it.  Its all pretty wishy washy and leans heavily on their discretion to be honest. It's over a decade old and doesn't even have the current business name on it! I did question this but they said nothing has changed. I worked for a large well known private company so it's not like I'm the first person who applied for this. I haven't been able to get any other policy documents,  terms and conditions,  the medical report they wrote or anything really. They just sent a letter saying they were granting partial incapacity and to expect a pension pack and then this pack which only gives the total amount not any options for monthly payments. I don't know if they'll want to reassess me? And i don't know if by accepting this amount,  I'm waiving a right to challenge the 'partial' classification in the future. They haven't worded it like an offer they've worded it like 'here's what you are getting'.

If i can get a annuity in spite of my age (I've seen you can get fixed term ones so maybe i could just get a 25 year?) And spend the pension pot on that but then they reassess and change their minds,  will i owe them money? I don't want to agree to something without knowing what I'm agreeing to and i want to get the best value from this amount of money as i can so i can know that part of my money for bills each month doesn't rely on the whims of whoever is in government but i also don't want to rock the boat as everyone is acting like it's outlandish that I've even been granted what i have considering my age and i do know that I'm lucky and i kind of fell in to this eligibility without knowing what any of it meant but also,  the terms they have sent say absolutely nothing about age so why wouldn't they grant me incapacity when i meet the terms of it?

The pack they sent is 90% forms so they clearly think they've told me all i need to know to make a decision but it doesn't really feel that way! There's a sheet saying how important it is to get advice,  that tells you about pension wise and then at the bottom there's a text box that pretty much says 'don't worry about any of that if you are under 50, just sign form f to say you didn't want advice! But i don't not want advice! I just have no idea where to get it. 

Anyway that's my situation, if anyone has been in something similar or has any thoughts please let me know.  Sorry about how long it is!

Albermarle

It is a complicated situation but you will probably get some more relevant feedback, if you supplied some details about the pension involved.
Who is the employer?
Who is the pension provider?
How much is the pension pot now?
How old are you ?
Have you actually checked your state pension position ?

[Deleted User]

Is there an HR department that could advise you? Are you a member of a union? What is being offered.? Do the figures add up for you? The lump sum could come in useful for you. Do you rent or have a mortgage? Is the type of ill health retirement the one that says you cannot enable in any future work in any area or just the type of work you are doing now? 

Sorry about all the questions but the answers could help others to advise you.

sheslookinhot

Have you been through the process with your employer to find if there is a suitable alternative position in the organisation ?

baffledandconfused

Thanks for your replies!

I'm not comfortable giving any more identifiying info than I already have if I'm honest but its a private company so local authority/nhs/ teachers/ police pensions are different. I worked in financial services (unfortunately not pensions or I would know more!) It was a defined contribution scheme and the money in the pot would be enough for an annuity covering what I want if I were 50, but obviously I'm not so I'm unsure if the eligibility/ terms would work considering my age.

In terms of state pension,  I'm claiming new style esa in order to get equivilent national insurance credits and I've never not been in work/ further education until now so should have full stamps. Honestly I have no idea what the state pension will be like in 30 years so I can't really make predictions based on that but I'm happy taking the gamble to deal with it when I get there if I get there. I would happily live off the current state pension amounts for those with 35 years of NI credits,  it's more than I'm living off now.

I'm a member of a union but honestly I don't think they will be very helpful here, they aren't fantastic if I'm honest but if citizens advice are no help then that's probably a good port of call. HR are next to useless,  another reason that I don't want to name the company as an honest summary of how they've dealt with this is liable to be seen as bad mouthing the business!

As far as my understanding goes,  the retirement puts no restriction on future work but that's not too relavent in my case as my health does! There's no hope of fixing the damage I already have and the progression is unlikely to slow.  I'm assuming that the partial incapacity is wholly centred on my age and the possibilty of medical advancement but as things stand,  that advancement would have to be nothing less than a miracle to get me to a place where I could work anything close to full time again. I'm not dying but I'm definitely not likely to get better! It's not a problem,  I've made my peace with it. I would have left even had I no pension as I had no option but to,  my condition causes severe pain and fatigue and I was running myself to the bone just trying to carry on working. I had already changed my career right at the start of it because of my heath and only managed to work as long as I did because it was a office job and I had lots of adaptions to lessen the impact of my disability. By the time I stopped working I had just about every physical symptom of stress out there just from pushing through and putting my health on the backburner. There is no doubt in my mind that had I continued on that track,  there was no way I was making it to 67 just from the strain I was putting on my heart. The good news is,  since I initially went off sick I'm making good progress there! I'm now only suffering from symptoms directly related to my condition and no longer have mysterious cardiological problems or constant nosebleeds or any of the other strangeness my Dr has chalked up to physical strain and stress. I'm glad I managed to work as long as I did but it came at a cost and were I smarter I wouldn't have worked nearly as long as I did. My Dr's certainly didn't want me to!

I've never had a lot of money so I'm used to living frugally. Since my sick pay ran out I've been living off state benefits and since those aren't taxed, I have round about the same money at the end of the month. Working was costing me a lot of money as it turns out and so my cost of living is even lower now. If I were 50, I could cash in the whole pot for a fixed term annuity of £500 a month for the next 25 years. If I can get anything like that in spite of my younger age I would do so happily. I just want to be less reliant on state benefits,  I'm not in need of more money. I have no need for a lump sum,  if I tried to live off savings it would make me anxious, I would rather know I have a guaranteed income even if it isn't the 'smartest' use of the money. If I can take the money monthly, I'll still need to top it up with universal credit and so I'll have the same amount of money each month with this pension as I would just claiming the benefits on their own. The universal credit will be reduced pound for pound by the pension. I could just not take it and live off the same amount of money at the end of the month with UC and at retirement age I would have the pension pot there waiting for me but I don't want to do that I would rather have the security now. It's not that state benefits are particularly high,  more that I was paid very little! I'm of a generation that never expected to be able to buy property and in spite of high grades and working hard,  high paid employment was never accessible to me. I just don't have the expectation of a flash retirement,  I'm not bothered by not having retirement savings in old age.

I haven't missed out on anything by not having this money at the end of my life. In another life I could have easily never put any retirement savings away and I would have happily lived off of a state pension, I was lucky that I had the money spare and decided to buy in and so now have access to this money but I would rather have the security of living off it now than sitting on it for a old age I might not even see. 

I would be living off the same amount on state benefits as I was working full time and it'll be the same amount with this pension and UC too. But I feel a lot more secure having half of my income coming from a private pension than entrusting it all in the hands of the dwp. I'm happily renting and the pot isn't large enough to buy a house outright even if I wasn't. I'm happy with my decision to take it now and take it monthly I'm just not sure how to go about it.

Marcon

baffledandconfused said:

My work have retired me early because of ill health and I'm a little confused by what is avaliable to me and what I should be doing.

They sent me a pension pack but its all just generalised information, it tells me to get advice from places that only offer appointments/ advice to those over 50. The only part that isn't generalised is the amount for the pot, for which they've given me a savings amount and then an augmentation. I've got over 30 years before I hit 67 so I've been retired incredibly early and I'm not sure if this will limit my options? I'm currently on new esa and UC as well as pip. All I want for the pension is as much money as I can get each month for as long as possible up until retirement age. I'm not interested in it lasting past that and I don't want any lump sum. I know that taking the money in this way will just reduce the amount of UC by the amount I get each month and i won't get any extra money,  I'm happy with this. frankly,  I don't trust the DWP and so would like to rely on them as little as possible. Any money I can get from a pension rather than UC, helps me feel secure that I'm not wholly reliant on their tests and assesments and any future changes in rules.  I was expecting the pension pack to quote me an amount for a monthly pension and then i could choose to stick with them or leave and see if a different company might quote a different amount but it doesn't? They talk about the option of an annuity but they don't say if it would be with them or if i have to find it and they just say 'to be advised seperately' next to monthly on the options sheet.  I don't know if this means i can ask them for a quote or if it's saying 'you'll have to do that yourself'.

They've given me a form to sign away my right to a pension wise appointment but from what i can tell i can't get one anyway as I'm not over 50? I have contacted them to ask and I'm going to try to talk to citizens advice too but honestly i don't know where to start so if anyone's been in this situation or is familiar with it then I'd appreciate any thoughts.

I think I'm going to have to talk to a financial adviser but I've no idea where to start. I'm working class and no-one i know really does 'personal finance' so this is all really new to me. I'm worried that I'll find someone dodgy and they'll over charge me or give me bad advice and i won't realise! I'm also worried they will be more concerned with retaining savings till I'm retirement age than getting the best value each month from this pot over the next few decades. I'm happy living off a state pension if i get to that age (likely will,  I'm not getting better but it's a joint condition so it's unlikely too kill me) most people i know don't have a private pension,  i just paid in to it as i was with a company that would more than match your contributions and it seemed like a good deal. What i know about personal finance is all self taught from the internet and there's hardly anything about retiring this early or how it works so I'm coming up short.

 The scheme was based on what i paid in to it not my salary and ill health was based on being able to do your normal job in gainful employment so as my symptoms are progressive and i won't get better,  there's no real argument that I'll be any more able to work in 5 years than i am now but when they assessed me,  they've granted partial incapacity? It took them 2 years to get to that point so I'm inclined just to go with it for now but they haven't given me any definition of what partial incapacity means at all,  i haven't been able to get them to supply me with anything but a 'trust deed and rules' which gives a few lines saying there is a ill health retirement option,  says its based on your normal job and gainful employment and then says that they may allocate extra amounts to the pension pot 'as directed by [employer]'. There's a bit where they say they retain the option to reassess you at any point but that's it.  Its all pretty wishy washy and leans heavily on their discretion to be honest. It's over a decade old and doesn't even have the current business name on it! I did question this but they said nothing has changed. I worked for a large well known private company so it's not like I'm the first person who applied for this. I haven't been able to get any other policy documents,  terms and conditions,  the medical report they wrote or anything really. They just sent a letter saying they were granting partial incapacity and to expect a pension pack and then this pack which only gives the total amount not any options for monthly payments. I don't know if they'll want to reassess me? And i don't know if by accepting this amount,  I'm waiving a right to challenge the 'partial' classification in the future. They haven't worded it like an offer they've worded it like 'here's what you are getting'.

If i can get a annuity in spite of my age (I've seen you can get fixed term ones so maybe i could just get a 25 year?) And spend the pension pot on that but then they reassess and change their minds,  will i owe them money? I don't want to agree to something without knowing what I'm agreeing to and i want to get the best value from this amount of money as i can so i can know that part of my money for bills each month doesn't rely on the whims of whoever is in government but i also don't want to rock the boat as everyone is acting like it's outlandish that I've even been granted what i have considering my age and i do know that I'm lucky and i kind of fell in to this eligibility without knowing what any of it meant but also,  the terms they have sent say absolutely nothing about age so why wouldn't they grant me incapacity when i meet the terms of it?

The pack they sent is 90% forms so they clearly think they've told me all i need to know to make a decision but it doesn't really feel that way! There's a sheet saying how important it is to get advice,  that tells you about pension wise and then at the bottom there's a text box that pretty much says 'don't worry about any of that if you are under 50, just sign form f to say you didn't want advice! But i don't not want advice! I just have no idea where to get it. 

Anyway that's my situation, if anyone has been in something similar or has any thoughts please let me know.  Sorry about how long it is!

There's free, impartial and expert help readily available at the end of a phone or email. See https://www.moneyhelper.org.uk/en/pensions-and-retirement

I'd send them a copy of the question just as you've posted it above and then ask if you could talk to someone at MoneyHelper to help you understand your position. There are plenty of well meaning people here but without seeing quite a bit of documentation any help is going to be based quite heavily on 'best guess' - and you need accuracy.

baffledandconfused

I'm actually waiting to hear back from them at the moment so hopefully they'll have some advice!

xylophone

You might need to consult an IFA with expertise in pensions. A fee will be charged.

https://adviserbook.co.uk/

You would tick "confirmed independent" then the other options as required.

sevenhills

So you are 37, too early to retire, in most cases.

Marcon

sevenhills said:

So you are 37, too early to retire, in most cases.

Ill health retirement has no minimum age, provided it is supported by written evidence from a registered medical practitioner.