Planning for early retirement & getting conflicting information re civil service Alpha pension

Wobble101

I've been in the civil service for 5 years and am hoping to retire in a few more years at 61. I've been looking at the new retirement modeller on the mycsp website to play around with the implications of retiring at 61 vs 62 and to see what impact taking a lump sum has. The figures I am getting now are very different to the ones I got when I did this last year and I'm unsure which to trust. 

My last annual statement puts me at £14,700, from age 65 onwards (I am paying EPA). My previous attempt at using the modeller suggested I would receive a pension of £15,680 at 61 plus a lump sum of £104k. The current modeller suggests a pension of £11,700 at 61 plus a lump sum of £78k. 

Given that I will only be paying in for 2.5 more years, I suspect the estimate I've just received is more accurate than the previous one - perhaps I misunderstood something along the way. But I'd welcome other thoughts. 

Thanks so much. 

QrizB

What Alpha pension have oyu accrued to date?

What does the current modeller suggest for retirement at 65, and how does that compare to your last statement?

hugheskevi

I've been looking at the new retirement modeller on the mycsp website to play around with the implications of retiring at 61 vs 62 and to see what impact taking a lump sum has. 

Is it wise to take any lump sum at all at such a young age, given how poor the commutation rate is? Taking taxed income is likely to give a superior financial outcome.

I've been in the civil service for 5 years... My last annual statement puts me at £14,700, from age 65 onwards (I am paying EPA). 

Setting aside inflation adjustments, that is alpha accrual of £2,940 p/a, which is consistent with pensionable earnings of around £127,000. The inflation adjustments will reduce this, so presumably you earn a bit above £100,000 p/a?

My last annual statement puts me at £14,700, from age 65 onwards (I am paying EPA). My previous attempt at using the modeller suggested I would receive a pension of £15,680 at 61 plus a lump sum of £104k. The current modeller suggests a pension of £11,700 at 61 plus a lump sum of £78k. 

£14,700 plus 2.5 years accrual at £2,940 p/a would be £22,050 (ignoring inflation increases) payable from EPA age. Reduced for taking 4 years early would be about £18,500 from age 61. Commuted to take a lump sum of £78,000 would be £12,000. So the current modeller looks about right on the very limited information available, if the inferences I've made are accurate.

Wobble101

QrizB said:

What Alpha pension have oyu accrued to date?

What does the current modeller suggest for retirement at 65, and how does that compare to your last statement?

Thank you. So far I have accrued £14k - . My statement doesn't give an estimate as to what I would receive at 65 were I to continue paying into the scheme, but the modeller quotes £32k (with no lump sum) as the relevant sum. 

Wobble101

hugheskevi said:

I've been looking at the new retirement modeller on the mycsp website to play around with the implications of retiring at 61 vs 62 and to see what impact taking a lump sum has. 

Is it wise to take any lump sum at all at such a young age, given how poor the commutation rate is? Taking taxed income is likely to give a superior financial outcome.

*** I have two other pensions that kick in at 65 and 66, the latter of which is generous. So this is about helping me manage the gap between early retirement and receipt of those pensions. ***

I've been in the civil service for 5 years... My last annual statement puts me at £14,700, from age 65 onwards (I am paying EPA). 

Setting aside inflation adjustments, that is alpha accrual of £2,940 p/a, which is consistent with pensionable earnings of around £127,000. The inflation adjustments will reduce this, so presumably you earn a bit above £100,000 p/a?

*** I did in the relevant period, my salary has gone down a little since. ***

My last annual statement puts me at £14,700, from age 65 onwards (I am paying EPA). My previous attempt at using the modeller suggested I would receive a pension of £15,680 at 61 plus a lump sum of £104k. The current modeller suggests a pension of £11,700 at 61 plus a lump sum of £78k. 

£14,700 plus 2.5 years accrual at £2,940 p/a would be £22,050 (ignoring inflation increases) payable from EPA age. Reduced for taking 4 years early would be about £18,500 from age 61. Commuted to take a lump sum of £78,000 would be £12,000. So the current modeller looks about right on the very limited information available, if the inferences I've made are accurate.

*** Thanks. I wish I'd kept better notes from my previous calculations but suspect I misrecorded something.

Thanks very much - answers in ** above.