Barclays Bank - 1964 Final Salary Pension Scheme - Help!

xylophone

Ask WTW

(a) Annual Pension before any commutation.

(b) Maximum Lump Sum available to commute

(c) The commutation factor that will be applied if you choose to take a lump sum ( presumably you could choose to take less than the maximum)?

Further thoughts. Your post below.

https://forums.moneysavingexpert.com/discussion/5897714/old-staff-barclays-pension

I believe that you are female.

All your deferred DB pension was accrued between 1978 and 1986. The Normal Scheme Pension Age was 60 for both men and women

although GMP age was 65 for men.

The pension scheme was contracted out and  therefore part of your pension is a GMP.

I believe that the Barclays scheme revalued the GMP at Fixed Rate - this would be at  at 8.5% given your date of leaving.

The excess over GMP revalued differently.

Your pension in payment should show as split between revalued pre 86 GMP and revalued excess.

One would expect that at pension increase date you would see no increase on the GMP element while the excess would increase under

scheme rules.

You will have a state pension deduction from your Barclays pension when you reach SPA (67).

This was advised when you left and does not increase.

Ask WTW to confirm your situation regarding GMP and excess.

Have you obtained a state pension forecast?

https://www.gov.uk/check-state-pension

glitzy

Wow thank you for the questions to ask😍

Yes I am female, I was 60 last year in April but didn’t take my pension as I wanted it to increase it but my friend has a smaller Barclays pension under £30,000 & was told by her accountant she would be silly not to take it as she gets it until she dies. So that’s why I am looking into mine.

September 2022 quote

This years 29th July quote

Sorry for the photos, I did ask for it to be sent in email but to no avail!

I qualify for full state pension but I am aware I will have £73.69 deducted a year, this was confirmed on the phone it was a year, very surprised it’s a year.

yes it’s written done 8.5% but have been receiving letters saying deferred pension will increase by 4.60% & this is applied to pension in excess of any GMP.

Just going to read the link you attached 👍🏻

Silvertabby

glitzy said:

Wow thank you for the questions to ask😍

Yes I am female, I was 60 last year in April but didn’t take my pension as I wanted it to increase it but my friend has a smaller Barclays pension under £30,000 & was told by her accountant she would be silly not to take it as she gets it until she dies. So that’s why I am looking into mine.

September 2022 quote

This years 29th July quote

Sorry for the photos, I did ask for it to be sent in email but to no avail!

I qualify for full state pension but I am aware I will have £73.69 deducted a year, this was confirmed on the phone it was a year, very surprised it’s a year.

yes it’s written done 8.5% but have been receiving letters saying deferred pension will increase by 4.60% & this is applied to pension in excess of any GMP.

Just going to read the link you attached 👍🏻

In round figures, the commutation rate used in the 2022 quote was 1:26.  High in comparison with the public sector, but quite possible in private sector schemes.

But then we come to your July quote, which seems to be using a commutation factor of over 1:140.  Just not possible.

The letter gives a number to ring if you think that any of the information given is incorrect.  Please do that, ask what commutation factor they have used, and ask them to check the maximum cash/reduced pension figures from your latest quote.

xylophone

I qualify for full state pension but I am aware I will have £73.69 deducted a year, this was confirmed on the phone it was a year, very surprised it’s a year.

See my post above - the SPD is deducted from your BARCLAYS pension NOT your state pension.

You should obtain your state pension forecast - it is not impossible that you have qualified for an amount over the full NSP but 

your forecast should clarify.

With regard to your GMP, as it was at Fixed Rate of 8.5% for 36 years, at GMP age (60) £2,333.76 is correct.

You continued to defer its payment after your GMP  age.

If a member retires more than seven weeks later than  60th birthday (women) / 65th birthday (men), the accrued GMP must be 

increased by at least 1/7% for each complete  week thereafter.

With regard to your excess over GMP, you were told that the scheme increase had been applied for 23/24. Presumably it was 

also applied for 22/23.

It may also be the case (YOU COULD CHECK WITH WTW) that the Barclays Scheme offers late payment increases (for pension 

deferred after NRD) on Scheme Pension.

I still CANNOT explain the commutation rate on your July 2024 quote.

However,  as far as I understand it, as things stand AND THE JULY 2024 IS TAKEN AS GOSPEL, you should note that  if you now 

bring your pension into payment and take option one (with lump sum) where GMP is stated as £2944 and scheme pension as  

£610.35, at the next pension increase date (October?), you will receive NO INCREASE on that £2944. The  £610 will increase 

under Scheme Rules (up to 5% depending on inflation).

if you take option 2 (no lump sum),  at the next PI date, the £2,333.76 will receive NO INCREASE while the balance (£1,359.49) will 

increase under scheme rules.

You should of course confirm all the above with WTW .

The Lump Sum would be tax free. The balance would be taxable as income.

If you take the full pension, it is all taxable as income.

DO COME BACK ONCE YOU HAVE CLARIFIED THE SITUATION.

glitzy

Thank  you Silvertabby, I thought it was too good to be true, initially I thought it was last year’s pension I didn’t take spread over 6 years until State Pension Age.

I will definitely try & speak to a manager to get clarity. I have read that WTW ask for money back if they have overpaid even when it’s their fault. The thing is we are meant to get advice about what to do with our pensions but if WTW are not giving the correct figures how is anyone meant to help when the figures do not add up🤷🏻‍♀️

You, xylophone & everyone has been so helpful especially as pensions are so confusing to me. I just want someone to say this is the best deal for you😂

xylophone

Incidentally, in 2013 poster Mike F (taking his deferred Barclays 64 at NRA (60) commented


https://forums.moneysavingexpert.com/discussion/comment/63411950/#Comment_63411950

Regarding the commutation factor, with this Scheme it is slightly over 18 which I believe is reasonable.

While poster Bert19 (proposing to take his pension  in 2020 (five years earlier than NRD) was offered 26

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

This is the CF you were offered in the quote two years earlier than your NRD.

And here on another forum back in 2018

https://www.lemonfool.co.uk/viewtopic.php?t=9332#google_vignette

I've just received a letter from Barclays telling me about my Defined Benefit pension options with them from age 60, ............

Option 1 - £2,500 per year

Option 2 - Tax-free lump sum of £12,395 then pension of £1,859 per year

This person would give up  £641 of his pension to "buy" a lump sum of £12,395, a commutation factor of a little under 19.5

 

Given the above, and accepting that CFs  are "subject to change"

 (see https://thebigtent.paraplannersassembly.co.uk/discussion/225/barclays-bank-ukrf-trustees-wont-provide-commutation-or-early-retirement-factors)

 some explanation of your offer of 140 seems called for....

FIREDreamer

Silvertabby said:

glitzy said:

Wow thank you for the questions to ask😍

Yes I am female, I was 60 last year in April but didn’t take my pension as I wanted it to increase it but my friend has a smaller Barclays pension under £30,000 & was told by her accountant she would be silly not to take it as she gets it until she dies. So that’s why I am looking into mine.

September 2022 quote

This years 29th July quote

Sorry for the photos, I did ask for it to be sent in email but to no avail!

I qualify for full state pension but I am aware I will have £73.69 deducted a year, this was confirmed on the phone it was a year, very surprised it’s a year.

yes it’s written done 8.5% but have been receiving letters saying deferred pension will increase by 4.60% & this is applied to pension in excess of any GMP.

Just going to read the link you attached 👍🏻

In round figures, the commutation rate used in the 2022 quote was 1:26.  High in comparison with the public sector, but quite possible in private sector schemes.

But then we come to your July quote, which seems to be using a commutation factor of over 1:140.  Just not possible.

The letter gives a number to ring if you think that any of the information given is incorrect.  Please do that, ask what commutation factor they have used, and ask them to check the maximum cash/reduced pension figures from your latest quote.

The GMP figures differ between the full pension and redced for PCLS pension in this year’s quote.

Comparing with the previous quote, I think the GMP in both cases should be £2,333.76 and that the pension with PCLS should be £2,333.76 (unreduced GMP) + £610.35 (reduced non GMP) = £2,944.11.

Looks like they have quoted the  GMP as the correct total pension in error?

So:

£3,693.25 per year, or
£2,944.11 per year plus £19,627.41 cash sum 

Commutation rate = £19,627.41 / (£3,693.25 - £2,944.11) = 26.2 (almost exactly)

xylophone

Firedreamer, have you looked at 

https://forums.moneysavingexpert.com/discussion/5897714/old-staff-barclays-pension

Her Statement of Deferred Benefits on Leaving




Pension benefits

Pension at 18 April 1986
GMP built up before 6 April 1988. £123.76 a year
Scheme pension (over the GMP) built up before 6 April 1997 £465.74 a year

Total Scheme Pension. £589.50 a year




£2,333.76 certainly seems correct for GMP revalued to GMP age (60) at Fixed Rate (8.5%).

She had the right to claim her deferred pension without actuarial reduction at age 60 (NRA) This was April 2023.

She didn't so so - presumably the GMP should have increased  in deferment after GMP age as explained in my previous?

It is not clear whether or not Barclays 64 pays Late Retirement increases.

It appears that her excess over GMP has revalued to  £1369.49


See also

https://forums.moneysavingexpert.com/discussion/comment/80725949/#Comment_80725949

which may (or may not) be relevant.

FIREDreamer

xylophone said:

Firedreamer, have you looked at 

https://forums.moneysavingexpert.com/discussion/5897714/old-staff-barclays-pension

Her Statement of Deferred Benefits on Leaving




Pension benefits

Pension at 18 April 1986
GMP built up before 6 April 1988. £123.76 a year
Scheme pension (over the GMP) built up before 6 April 1997 £465.74 a year

Total Scheme Pension. £589.50 a year




£2,333.76 certainly seems correct for GMP revalued to GMP age (60) at Fixed Rate (8.5%).

She had the right to claim her deferred pension without actuarial reduction at age 60 (NRA) This was April 2023.

She didn't so so - presumably the GMP should have increased  in deferment after GMP age as explained in my previous?

It is not clear whether or not Barclays 64 pays Late Retirement increases.

It appears that her excess over GMP has revalued to  £1369.49


See also

https://forums.moneysavingexpert.com/discussion/comment/80725949/#Comment_80725949

which may (or may not) be relevant.

If you correct for the wrong GMP in the 2024 quote, both quotes are identical.

xylophone

In which case, Glitzy should be expecting an amended quote

OPTION 1

Cash plus reduced pension

Tax Free Cash                    £19, 627.41 (maximum)

Plus a reduced pension    £2,944. 11 per annum

Which includes

GMP  accrued pre 6/4/88  £2,333.76 per annum

Plus pension over GMP      £610.35   per annum


OPTION 2

A Full Pension                       £3693.25 per annum

Which includes

GMP  accrued pre 6/4/88  £2,333.76 per annum

Plus pension over GMP     £1,359.49 per annum


In either case, the annual pension is taxed as income in the year of receipt.

If she takes option 1, she will see annual increases (up to 5%) on only £610.35 per annum.

If she takes option 2, she will see annual increases (up to 5%) on £1359.49 per annum.