Partial retirement or just keep going?

Bluebonic

Hi, I am 65 and become eligible for my state pension in April. i still work full time so have decided to defer my state pension for 12 months as it would be taxed at 40%. 

I was in the Premium pension scheme for 17 years until i was transferred into the Alpha scheme in 2022. 

My question is this, I still enjoy my job and am content to continue working full time, but would doing actually be detrimental to me for any reason?  Friend of mine too partial retirement a while ago because he believed he could earn much the same without working so hard? He wasn't at state pension age I hasten to add. For what its worth, I think I would be granted partial retirement if I asked but, ideally I want to keep working, provided doing so is contrary to my interests. 

Bluebonic

sorry, i should have said, I am a civil servant.

Phossy

Lots of things to think about there, but I'd suggest you start by laying out all your potential income, and that includes getting a projection on your Pension. 

BoGoF

Depending on your premium forecast I would have thought partial retirement was a no brainer. Your premium benefits would have been payable without reduction from aged 60 so those 5 years of 'unpaid' pension are lost.. Your friend is correct, you could potentially have more or less the same net money (part time salary + pension) by going part-time. I see it as working for part of the week for free for those who past 60 in these circumstances.

Brie

Would having a smaller salary effect your eventual pension payout?  I know that for some DB type schemes going part time can (or used to) effect the amount used for calculating what you got but there may be a "last 5 years average salary" or something similar used.  I also know that some schemes allow you to start collecting your pension while continuing to work so maybe that would take care of the issue. 

fyi - working part time is lovely.

DE_612183

I think alpha allows you to build up your pension year on year - so for 2023-23 you would get 2.32% of your pensionably pay put aside - and every year adds onto that - so goin part-time would only impact the amount set aside for that year.

Yorkie1

You may find some posts on this thread useful re. calculations of premium pension
https://forums.moneysavingexpert.com/discussion/6499046/civil-service-premium-pension

I believe, as others have said above, that you don't get any more from Premium by delaying payment. So you're just losing money that you're entitled to, unless carrying on working full time in your current role is more important to you than receiving that premium pension payment. Partial retirement would enable you to receive that money and downsize your grade or hours so you don't end up being paid more than you currently are.

jamesd

For sheer freedom to do what you want when you want it's hard to beat fully retired, not part time with a work schedule that continues to rule your life.

Death also slowly creeps up on us all and a year not retired is unrecoverable.

It might be best to stay full time then later change to no work.

So far as work pension goes it is likely to have an averaging or best x in y years rule. It also might not increase if you don't take it at its normal retirement age.

zagubov

Why are you working for nothing?
Because that's what's happening. By taking partial retirement you could be working a few days per week  and keeping the social benefits of employment, while having loads of "me" time doing whatever you see fit.
And still getting a full salary albeit some of it being your hard-earned pension (use it or lose it).
Plus you can probably build up additional pension form your part-time work.
Stop saying no to money you've earned.
The happiest pensioners are those who still work (not FT though!) , and the happiest of those are the ones working in a familiar job.

xylophone

ideally I want to keep working, provided doing so is contrary to my interests. 

Masochist?

I would have thought that you could  have taken your Premium at age 60 even if you continued to work full time.

You could then have regarded it as income replacement and contributed as much as possible of your earned income to CS AVC or a personal pension?

If you took both your CS pension and your  state pension as soon as possible, how much of your income would they replace?

How much could you then contribute to AVC/personal pension from your earned income?

german_keeper

xylophone said:

I would have thought that you could  have taken your Premium at age 60 even if you continued to work full time.

I'm pretty sure you can't take a Legacy pension and work full time. Although I don't think the scheme guides specifically state that. But in the relevant section they just talk about partial retirement so I assume it follows that you can't carry on FT. Even then if your part time earnings plus pension is more than FTE earnings the pension is subject to abatement. I think I read that abatement doesn't apply in Alpha so maybe working full time and taking Alpha will be possible but likely a good few years until anyone is in a position to test it out.

The other thing for the OP to note regards not drawing a Legacy pension at 60 is that not only are you throwing the pension money down the drain, under partial retirement as long as you can agree your hours just under the abatement line, your net pay will be better because you won't be paying NI on the part of your income that is pension. I was about £100 per month better off working PT than I would have been working FT.

The only argument I ever saw in favour of working FT (and I think it made some sense) was someone who didn't have a large Legacy pension and needed to work FT to SPA to maximise Alpha accrual during that period. Still think I might have been getting the calculator out to see if I could find an alternative strategy.