Final salary pension

muswellblue

Albermarle said:

Normally  a pension with a retirement age of 65 would reduce by about 40% if you wanted to take it at 55.
So I am a bit confused about these figures of  15.8% and 7.3 %.

Just got sent this from pension provider for forecasts at 55.

01/01/23 % of pension reduction 15.8
               % of automatic cash lump sum         
               Reduction 2.6

01/07/22 % of pension reduction 7.3
               % of automatic cash lump sum
               Reduction-increase of 5%

01/02/20 % of pension reduction 13.5
               % of automatic cash lump sum
               Reduction 0

Earlier % of pension reduction 17.4
           % of automatic cash lump sum
           Reduction 1.2

they said the changes in 2022 were unusually favourable due to the changes in the financial markets. 

I’m assuming different schemes have different ways of calculating reductions?

apart from 2022 the other years seem quite consistent with each other. 

xylophone

I’m assuming different schemes have different ways of calculating reductions?

Yes and the factors are subject to review by the scheme actuary.

Example

https://pensions.shell.co.uk/scpf/left-shell/what-if-i-want-to-take-my-pension.html#:~:text=Your pension will be reduced,may change in the future.

You can request an early retirement quotation from the Pensions Administration Team, who will confirm the procedure if you wish to take your pension early. Your pension will be reduced to reflect the longer time it will be paid. The early retirement reduction factor applied is currently 3.5% for each year you retire before Pension Age. This factor is subject to regular review and may change in the future.

muswellblue

Just found out if you joined the scheme before 2003 the retirement age is 60. That may explain why the reduction isn’t as much as it could’ve been. 

Ksw3

Will you be 55 before 6 April 2028? 

muswellblue

Only just. My 55th birthday is feb 28. Otherwise I would have to wait till I was 57.