Pension Protection Fund

My partner has had a letter from the PPF as she is coming up to her 60th birthday.

The letter quotes an amount for her monthly pension and a lump sum.
When we went on to their website, the amounts quoted in the letter had both gone down. The booklet they sent doesn't mention anything about this. 

Anyone have experience of whether the amounts reduce by a lot the closer you get to the retirement date?


  • gm0
    gm0 Posts: 857 Forumite
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    Explanation 1

    It would be poor to calculate an individual regulated quote/wake up letter for a nearing retirement member.  And to use uprated / current data for that.  And also have scheme wide "last years" not uprated earlier data on the website hanging about for everybody.  Which that same retiree can log into. And be confused by. 
    But it could happen.  And has before.

    Effective "as of" dates on the letter and website can perhaps be checked subject to the design of both being at all friendly.

    As can an approximate calculation on the difference in entitlement shown

    If it is close to a one year accrual (if active) and an added inflation lift to all accrual - then there is your explanation of the amount of the difference.  One year lower on the website.  Which strongly suggests this "config management" old data vs new data explanation is correct.  

    1) they will get around to updating it

    2)  The letter if it is indeed more recent and not messed up in some other manner - is more likely to be *closer* to the final amount when you actually get the real number when you start to claim it.

    I can't think of a good pension related reason why a DB pension with the same assumptions on "when" it is taken would reduce in the manner described.   This leads to

    Explanation 2

    A projection for taking a pension and estimating its value will make assumptions.  And if the assumptions in the letter and a website calculator are changed.  So will the values.  

    If a projection is a form of "at normal retirmement age" on one.  And "what would i get if i started now" on the other.  The latter would be smaller.  How much smaller would depend upon how many years earlier "now" is. Than the standard amount at the standard start date - projected well or badly.   Projections are tricksy things. 

    Within bands pensions can be had early or late.  And they can be reduced or enhanced according to scheme rules as you move how long you will take it up and down. Given that is the case you can make different assumptions about that - and then it varies the amount of the estimate.

    Schemes don't usually guess about future inflation and uprating decisions not yet made.  So the information you get doesn't include all of that.  Accurately.  Because it can't.   It will say what it does do.  And what it excludes.  But it won't be completely easy reading.

    It should however - be up to date to the last time annual uprating for inflation was done.


    Do these checks and/or give them a call and ask the question.
    If they are communicating like this - yours won't be the first call
  • Thanks for the reply, bit beyond me I'm afraid though. Think she will have to contact them to find out what's going on.
  • Marcon
    Marcon Posts: 10,594 Forumite
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    Bengal21 said:
    Thanks for the reply, bit beyond me I'm afraid though. Think she will have to contact them to find out what's going on.
    What's the date on the letter she received?
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Strange things can happen as they change the factors that they use to calculate the numbers from time to time.(annually?) For my wife she had a projected number to take pension in 3 months time at nra. Went on the website and asked for a retire now number and both lump sum and annual pension were higher so she took pension 3 months early. Didn't seem logical at the time but we were better off so we're happy.
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