Taking PIE offer?

Nursejackie

I’ve got an old DB pension I can take in May at 55. I’d like to do this as frankly I’m knackered, nursing is tough at 55 and I have MIL who has increasing support needs. It would allow me to drop to 3 days a week I’m also in 2008 and 2015 NHS pensions and have a small private pension with Avivva I plan to draw at 65/67.

I sent off for my retirement pack and have also been offered PIE. See figures below: 

Pension at 55 £7552

Pension at 55 with lump sum £5857 and £39047

PIE at 55 £10289

PIE at 55 with lump sum £7375 and £49172

 The break even point with inflation at 5 percent is 77 years of age. I understand I’m basically selling future rpi increases but my dilemma is due to my family history, I have heart disease on both sides of my family and lost a lot of relatives pre 70 to strokes/heart attacks. I’m monitored by my GP but still.

My husband isn’t in great health picks up a new chronic ailment every year will retire at 60 with a dc pot of around £350K. We both will have full state pensions.

We have no debts and a mortgage free home but we could do with a new car, and to enjoy travel while we still can. Both kids have left uni and in good jobs.

I haven’t got a specific question just wondered what people think of the figures or just general observations. I’ve found the boards so helpful when I was a DFW and then a MFW…

Brie

I had to google this as I had no idea what PIE was referring to!!   So now that I now I would be wanting to ensure exactly what is being given up in practical terms and using small words so I could understand!!  I guess if neither of you have spectacular health that future increases may not be a biggie.  And you'll both have your SP at whatever age to supplement all this.  

A pension increase exchange (PIE) is an offer made by a pension scheme to its members to give up future contractual pension increases in return for a higher initial pension. This means that the member will receive a bigger starting income, but the pension will not increase with inflation over time. The PIE is in lieu of the scheme’s normal guaranteed increases that the member could expect to receive each year for the pension in payment. Any statutory increases would still occur 

WYSPECIAL

I had a DB pension where PIE was offered and they paid for independent advice before you decided. Does the NHS offer anything like that so someone can go through all the options with you?

Nursejackie

WYSPECIAL said:

I had a DB pension where PIE was offered and they paid for independent advice before you decided. Does the NHS offer anything like that so someone can go through all the options with you?

It’s not an NHS pension it’s an older employer. They will pay for independent advice I’ll be doing that. 

hyubh

WYSPECIAL said:

I had a DB pension where PIE was offered and they paid for independent advice before you decided. Does the NHS offer anything like that so someone can go through all the options with you?

The NHS scheme doesn't offer PIE, it will be an old private sector DB pension.

Brie said:

The PIE is in lieu of the scheme’s normal guaranteed increases that the member could expect to receive each year for the pension in payment. Any statutory increases would still occur 

Which if the pension exchanged is pre-97 will be nil.

Nursejackie said:

I’ve got an old DB pension I can take in May at 55. I’d like to do this as frankly I’m knackered, nursing is tough at 55 and I have MIL who has increasing support needs. It would allow me to drop to 3 days a week I’m also in 2008 and 2015 NHS pensions and have a small private pension with Avivva I plan to draw at 65/67.

I sent off for my retirement pack and have also been offered PIE. See figures below: 

Pension at 55 £7552

Pension at 55 with lump sum £5857 and £39047

PIE at 55 £10289

PIE at 55 with lump sum £7375 and £49172

 The break even point with inflation at 5 percent is 77 years of age.

What exactly is the increase basis being forgone? Pension increases with your NHS pension are simple, there's a lot more variety with private sector DB. Also is this pre- or post-97 excess or both being subject to the offer...?

njkmr

Personally i would take it from what you have said.
Time to start relaxing and enjoying yourself a bit whilst you can.
I am currently doing the same sort of planning myself.
If your confident you can afford a decent standard of living on what you have now then its a no brainer.
I wont be working on a day longer than i need to just to fill the pot for someone else to enjoy when i croak it.
Good luck.
Im sure others on here may be horrified but for me its the right thing to do at 55 this year.

Nursejackie

 

What exactly is the increase basis being forgone? Pension increases with your NHS pension are simple, there's a lot more variety with private sector DB. Also is this pre- or post-97 excess or both being subject to the offer...?

Mainly pre 97 and increase basis is 5 percent or RPI whichever is lower 

jamesd

I'm wondering whether you and your husband can both retire at the same time but don't know his age, your other income, your minimum required income, when the other DB pensions you both have start paying and how much.

It seems that his health will restrict your joint activities most and I think that favours the same time.

You do potentially have different nursing options, like at a GP, that might reduce the difficulty of the job.

You can do a sufficiently decent plan by taking your state and work DB pension total income when everything is in payment. If that's enough, work out whether you can match it for each year between then and now just by subtracting the annual shortfall from your savings total.

If the guaranteed income is more than enough then you could consider using a mortgage later in the plan with the possible intent to repay it from the excess income. Possible is there because it's not evil to take out mortgages with intent to only have them cleared when you die.

Marcon

Nursejackie said:

WYSPECIAL said:

I had a DB pension where PIE was offered and they paid for independent advice before you decided. Does the NHS offer anything like that so someone can go through all the options with you?

It’s not an NHS pension it’s an older employer. They will pay for independent advice I’ll be doing that. 

By far the best advice is to go that route and see what the independent advice is.