Barclays Bank - 1964 Final Salary Pension Scheme - Help!

xylophone

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

xylophone

One other thought

£3693 - £2944 = £749

£3693 - £3544 = £149


Mistakes involving 7 and 1 are not uncommon......

And see

https://forums.moneysavingexpert.com/discussion/comment/76974537/#Comment_76974537

glitzy

xylophone said:

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

Thank you for the links, totally understand the drop in the pension. Still not understanding the commutation factor but if WTW confirm the totals are what I have received are they good or bad?

Silvertabby

glitzy said:

xylophone said:

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

Thank you for the links, totally understand the drop in the pension. Still not understanding the commutation factor but if WTW confirm the totals are what I have received are they good or bad?

As they stand, they are exceptionally, unbelievably, good.  But a commutation rate of 1:131 is way too high to be right.  By way of comparison, public sector pensions use a p.poor rate of  1:12, with some private schemes using a much more generous  1:25 or even 1:30.  But never 1:131.  That MUST be a mistake.

This needs sorting now, before you take your lump sum and pension - because even if your pension provider only realises their mistake several years down the line,  they WILL demand re-payment of the overissue.

Commutation rates specify how much annual  pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual  (index linked) pension for £12 of tax free cash.

glitzy

xylophone said:

One other thought

£3693 - £2944 = £749

£3693 - £3544 = £149


Mistakes involving 7 and 1 are not uncommon......

And see

https://forums.moneysavingexpert.com/discussion/comment/76974537/#Comment_76974537

I am not sure about the 7 and 1 mistake but I think there could be copy & paste error, as my Full pension has not changed in 22months whereas Cash & reduced pension has gone up £610.35. I am going to ring o. Friday to get them to confirm the figures & explain why one has gone up but not the other🤷🏻‍♀️

Dazed_and_C0nfused

Commutation rates specify how much annual tax free pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual tax free (index linked) pension for £12 of tax free cash.

I think you mean taxable pension 😯

Silvertabby

Dazed_and_C0nfused said:

Commutation rates specify how much annual tax free pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual tax free (index linked) pension for £12 of tax free cash.

I think you mean taxable pension 😯

Oops - amended!  

glitzy

Silvertabby said:

glitzy said:

xylophone said:

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

Thank you for the links, totally understand the drop in the pension. Still not understanding the commutation factor but if WTW confirm the totals are what I have received are they good or bad?

As they stand, they are exceptionally, unbelievably, good.  But a commutation rate of 1:131 is way too high to be right.  By way of comparison, public sector pensions use a p.poor rate of  1:12, with some private schemes using a much more generous  1:25 or even 1:30.  But never 1:131.  That MUST be a mistake.

This needs sorting now, before you take your lump sum and pension - because even if your pension provider only realises their mistake several years down the line,  they WILL demand re-payment of the overissue.

Commutation rates specify how much annual  pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual  (index linked) pension for £12 of tax free cash.

Thank you so much for persevering with me xylphone & silvertabby, so mine is worked out as £1 of annual (index linked) pension for £13.10 of tax free cash. I can’t wait to hear from WTW, hoping they won’t be so vague this time, I shall report on Friday 🤞🙏🏻

Dazed_and_C0nfused

glitzy said:

Silvertabby said:

glitzy said:

xylophone said:

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

Thank you for the links, totally understand the drop in the pension. Still not understanding the commutation factor but if WTW confirm the totals are what I have received are they good or bad?

As they stand, they are exceptionally, unbelievably, good.  But a commutation rate of 1:131 is way too high to be right.  By way of comparison, public sector pensions use a p.poor rate of  1:12, with some private schemes using a much more generous  1:25 or even 1:30.  But never 1:131.  That MUST be a mistake.

This needs sorting now, before you take your lump sum and pension - because even if your pension provider only realises their mistake several years down the line,  they WILL demand re-payment of the overissue.

Commutation rates specify how much annual  pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual  (index linked) pension for £12 of tax free cash.

Thank you so much for persevering with me xylphone & silvertabby, so mine is worked out as £1 of annual (index linked) pension for £13.10 of tax free cash. I can’t wait to hear from WTW, hoping they won’t be so vague this time, I shall report on Friday 🤞🙏🏻

That would be 1:13.1, not the 1:131 you have mentioned on an earlier post


Option 1 - Cash & reduced pension
tax free £19,627.41
reduced pension £3,544.46 a year

Option 2 - Full Pension £3,693.25 a year

Silvertabby

glitzy said:

Silvertabby said:

glitzy said:

xylophone said:

sorry not understanding commutation factor,

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-benefit-or-final-salary-pensions-schemes-explained

under

Examples of how defined benefit pension lump sums might be calculated

And with regard to

You did well to cash out when you did, as I saw mine was £111,000 in 2020 but I thought I would leave it so it would increase nicely but it’s now £80,601.08😢, didn’t realise it could drop as it’s a cash pension but the admin staff couldn’t explain it or I wasn’t understanding what they were saying 🤦‍♀️

https://www.ukemploymenthub.com/understanding-the-downturn-in-the-defined-benefit-pension-transfer-market/

https://forums.moneysavingexpert.com/discussion/6493721/cetv-or-cash-equivalent-transfer-values-on-pension-transfers-post-yours/p1

Thank you for the links, totally understand the drop in the pension. Still not understanding the commutation factor but if WTW confirm the totals are what I have received are they good or bad?

As they stand, they are exceptionally, unbelievably, good.  But a commutation rate of 1:131 is way too high to be right.  By way of comparison, public sector pensions use a p.poor rate of  1:12, with some private schemes using a much more generous  1:25 or even 1:30.  But never 1:131.  That MUST be a mistake.

This needs sorting now, before you take your lump sum and pension - because even if your pension provider only realises their mistake several years down the line,  they WILL demand re-payment of the overissue.

Commutation rates specify how much annual  pension is given up in return for a one-off tax free lump sum.  ie, in the case of the public sector 1:12, that's £1 of annual  (index linked) pension for £12 of tax free cash.

Thank you so much for persevering with me xylphone & silvertabby, so mine is worked out as £1 of annual (index linked) pension for £13.10 of tax free cash. I can’t wait to hear from WTW, hoping they won’t be so vague this time, I shall report on Friday 🤞🙏🏻

No, that's £131 of tax free cash for each £1 of pension given up.  Just not feasible!