Deferred benefits Local government pension

CSL50

Hi I am in the process of completing my deferrerd pension payment form so I can take my small private pension at 55 and still work part time. I am not sure whether to take a lump sum of 25% tax free which will allow me to do home improvements and buy a much needed car or have a smaller lump sum and get a loan for the car. On one hand I think get the highest annual pension as I could live for ages or just take the money and not worry about it. Any advice wise people?

CSL50

Ps it's a local government pension 

Silvertabby

The public sector commutation rate of 1:12 is notoriously p.poor, especially when taken so early.

Do you have any R85 protections?  If you post when you joined/left I'll have a better idea of what's what.

CSL50

Silvertabby said:

The public sector commutation rate of 1:12 is notoriously p.poor, especially when taken so early.

Do you have any R85 protections?  If you post when you joined/left I'll have a better idea of what's what.

Thank you for your reply.  I joined in 1998 and left Dec 2012 so 14 years full time .

Silvertabby

CSL50 said:

Silvertabby said:

The public sector commutation rate of 1:12 is notoriously p.poor, especially when taken so early.

Do you have any R85 protections?  If you post when you joined/left I'll have a better idea of what's what.

Thank you for your reply.  I joined in 1998 and left Dec 2012 so 14 years full time .

1998 to 2012 = 14 years actual membership.

2012 to 2030 = 18 years deferred membership.

14 + 18 + 60 = 92

What I am getting at is that you have R85 protections in respect of your pre 2008 benefits, but only if you continue to defer until you are 60.

At that point:

1998 to 31 March 2008 = pension plus automatic lump sum paid in full without any early retirement reductions.

1 April 2008 to Dec 2012 = NRA 65, so only 5 years of early payment reductions.

I know you have asked about taking the maximum tax free cash, but do you desperately need this money at 55?  Because the differences between the amounts payable at 55 and 60 will be considerable. 

CSL50

Thank you for your response ,this was useful. I am now going to look at this in more detail before I decide. The only thing is if I took my lump sum, and not 25% from pot, and pension would allow me to work 2 days a,week and have some fun. Losing both parents and seeing my sis battle cancer has changed my attitude to life a bit too!

Silvertabby

CSL50 said:

Thank you for your response ,this was useful. I am now going to look at this in more detail before I decide. The only thing is if I took my lump sum, and not 25% from pot, and pension would allow me to work 2 days a,week and have some fun. Losing both parents and seeing my sis battle cancer has changed my attitude to life a bit too!

Then do what's right for you.

I will just say that taking early payment AND full commutation would reduce your annual pension by a considerable amount, more than you may think, as you would also be giving up X years of uncapped (CPI) cost of living increases.  If just taking the pre 2008 automatic lump sum works for you, then that should give you a better long term return.

Good luck, to you and your sister.

CSL50

Thank you for your advice and good wishes. Wishing you a happy healthy 2025!

Silvertabby

CSL50 said:

Thank you for your ....... and good wishes. Wishing you a happy healthy 2025!

Thank you, and to you - but please don't use the 'A' word as the Mods don't like it!