Civil Service Pension - Leaving Early

Dazed_and_C0nfused

DE_612183 said:

marky_b_2 said:

DE_612183 said:

Thanks @Dazed_and_C0nfused - I'm 60 now and have worked for CS for jsut over a year - I was planning on leaving at about 2 years and taking the transfer -however it looks like now i will be there for possibly 2 and a half years - so when I'm about 62 - what I don't want is to the have to wait another 5 years to get the CSP - I'd much prefer to get a CETV and then take as draw down as and when I want.

I just want to make sure that's possible - if not I'll have to leave on 1 year 364 days!

You can take Alpha before State pension age but it will be reduced for taking it early 

I don't want to take it early and it to pay out for the rest of my life - as I'll only have about 2.5 years of contributions it will only be worth about £50 a month - I want to take the CETV and use it before I'm 67 to get the best use out of it.

The discussion has moved on a bit I think but as you are in the Civil Service pension scheme I don't think transferring out (once the two year period has passed) is even possible, unless it's to another public sector DB scheme if you change employer.

I think maybe you have underestimated how generous Alpha is.

2.5 years accrued on £50k/year will almost certainly tip over £3k/year pension once one annual revaluation if factored in

DE_612183

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

jimi_man

DE_612183 said:

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

You can commute at a rate of 12:1. So 12 x £500 (let’s say that’s 25%) would give you £6000. 

It’s not a great rate tbh. 

Dazed_and_C0nfused

DE_612183 said:

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

There is no automatic PCLS with Alpha.

You can give up some of your pension in return for a (tax free) PCLS but as @jimi-man says the rate isn't great considering you might be getting the pension for 30+ years.

DE_612183

jimi_man said:

DE_612183 said:

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

You can commute at a rate of 12:1. So 12 x £500 (let’s say that’s 25%) would give you £6000. 

It’s not a great rate tbh. 

So my £200 a month is £2400 a year, I give up £500 and get £6k in cash - but my monthly is now £158? ( 2400-500=1900/12 )

swindiff

I don't think you realise how valuable what you are contemplating giving up is.  You have already gone from thinking it was about £600/year when it is more like £2900/year for 2.5 years service.  That has not made you think, is this a good idea or not?  That 2.5 years service will heave earned you around 1/4 of full state pension.

Edited after the post below as some mistakes in my post.

DE_612183

swindiff said:

I don't think you realise how valuable what you are contemplating giving up is.  You have already gone from thinking it was about £100/year to being told it is more like £2400/year.  That has not made you think, is this a good idea or not?

I thought it *could* be about £50 a month ( or £600 a year ) based on leaving early - I know if I stick it out to 67 the monthly income would be more.

And yes the information I've been given has made me think about options - that's the whole idea of asking questions and getting answers and advice it gives you information make makes it easier to make informed decisions.

Whether it's a good idea or not which way I choose to go is down to my personal circumstances.

jimi_man

DE_612183 said:

jimi_man said:

DE_612183 said:

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

You can commute at a rate of 12:1. So 12 x £500 (let’s say that’s 25%) would give you £6000. 

It’s not a great rate tbh. 

So my £200 a month is £2400 a year, I give up £500 and get £6k in cash - but my monthly is now £158? ( 2400-500=1900/12 )

Yes that's right. Just to note that the 25% tax free is not a true figure since there isn't actually a 'pot' as such, so a 'pot' size is estimated by some calculation and then 25% is taken from that. But for all intents and purposes it's around that figure (or £600 or so if your yearly pension is £2400). 

In general (financially speaking) it's often not a great idea. However financial reasoning is only part of the equation and there are a whole host of other personal issues that affect the decision making, which are also equally as valid as the financial aspect. My view is that if someone comes along and categorically says take it/don't take it without knowing the individual's personal circumstances then usually they can be ignored. 

DE_612183

jimi_man said:

DE_612183 said:

jimi_man said:

DE_612183 said:

Ok, this is really helpful - if for instance my CSP works out at £200 a month - is there an amount of TFLS that I could take as well? 

Is it roughly 6.6 * annual salary - so a pension of about £200 a month is 200*12*6.6 = £15,840 ? 

You can commute at a rate of 12:1. So 12 x £500 (let’s say that’s 25%) would give you £6000. 

It’s not a great rate tbh. 

So my £200 a month is £2400 a year, I give up £500 and get £6k in cash - but my monthly is now £158? ( 2400-500=1900/12 )

Yes that's right. Just to note that the 25% tax free is not a true figure since there isn't actually a 'pot' as such, so a 'pot' size is estimated by some calculation and then 25% is taken from that. But for all intents and purposes it's around that figure (or £600 or so if your yearly pension is £2400). 

In general (financially speaking) it's often not a great idea. However financial reasoning is only part of the equation and there are a whole host of other personal issues that affect the decision making, which are also equally as valid as the financial aspect. My view is that if someone comes along and categorically says take it/don't take it without knowing the individual's personal circumstances then usually they can be ignored. 

Thanks Jimi - I'm definitely moving more towards keeping it in the scheme for as long as possible - but to eke it out till I'm 67 may not be feasible - but thanks for the advice and info - I know a lot more than I did a few hours ago!