Premium pension taking it before 55

Numbers2705

Hi. I have some questions on the civil service premium scheme to do with the option where they take the best 3 scheme year period out of your last 13 years to get the final sort earnings figure for the calculation.

I am currently 51. The unusual factor about my earnings is that in Oct 2015 I voluntarily went down 2 grades and have remained at that lower grade ever since.

this means that the full scheme years 2012/13 to 2014/15 have earnings higher even in cash terms than my current salary. If you take into account inflation since that period (about 30% over the period) they are significantly higher.

So in order to “capture” these years in my premium calculation I think I would have to take my premium pension by end March 2025. I will be 53 at that time. (I would look to do partial retirement but I don’t think that matters for my question)

I have read on other threads that if I take before 55 the (massive) inflation adjustment would not be applied.

what I am not 100% clear about is whether if I take at 53 the amount not adjusted for inflation once I reach 55 do they then re calculate and re-inflate the figure and I get paid that much higher amount from 55 onwards? If that is true I think it makes sense for me to take at 53 to “capture” the high earnings period - and live with the lower amount for 2 years.

waiting until 55 to get the inflation proofed amount sounds better - but the salary used will be much lower from the post October 15 period when I went down 2 grades.

But I’m a little worried have have misread/understood and there would be no inflation increase going back to 2012 applied from when I hit 55? Can anyone confirm either way?

massive thank in advance!

Brie

Can you take your pension before you're 55?  I didn't think it was allowed anymore.  

And if you do take your pension early would it effect what you can pay into a pension going forward?  And would it put you in a higher tax bracket?

hugheskevi

Numbers2705 said:

what I am not 100% clear about is whether if I take at 53 the amount not adjusted for inflation once I reach 55 do they then re calculate and re-inflate the figure and I get paid that much higher amount from 55 onwards? If that is true I think it makes sense for me to take at 53 to “capture” the high earnings period - and live with the lower amount for 2 years.

waiting until 55 to get the inflation proofed amount sounds better - but the salary used will be much lower from the post October 15 period when I went down 2 grades.

But I’m a little worried have have misread/understood and there would be no inflation increase going back to 2012 applied from when I hit 55? Can anyone confirm either way?

Your Premium pension would be recalculated and from age 55 onwards the higher amount paid.

You do not have to commence your pension to lock in the higher figure - just leaving the scheme is sufficient. You could consider switching to Partnership which involves leaving Premium so would lock in the higher figure.

Brie said:

Can you take your pension before you're 55?  I didn't think it was allowed anymore.  

The Civil Service schemes aside from alpha have protected minimum pension ages. Members who joined before 2006 can commence their pension from age 50.

r6mile

Others are much better versed in the CS pension scheme, but it seems to be like your best option is to leave the CS Pension scheme (I guess by March 2025?) so as to “break” the final salary link, and switch to the Partnership scheme.

I don’t think you can retire before 55 unless you have some special protection. Are you definitely looking to retire at 55? Because I think after 2 years you could then rejoin the Alpha scheme and keep accruing into that scheme, with your deferred Premium entitlement being protected.

hugheskevi

r6mile said:

I don’t think you can retire before 55 unless you have some special protection. Are you definitely looking to retire at 55? Because I think after 2 years you could then rejoin the Alpha scheme and keep accruing into that scheme, with your deferred Premium entitlement being protected.

It takes 5 years out of the scheme before the deferred Premium entitlement is protected. If you were to rejoin after 2 years the deferred award would be cancelled. 

Numbers2705

Thanks hugheskevi- will check out the partnership option