Superannuation early retirement

Maverick1251

I have paid into my pension for 38 years and was hoping to retire at 60 thinking I would loose about 10% of my pension, but after getting a quote, I would actually loose 36% of what was predicted which works out at just over £10.000 per year. 

My yearly pension would only be £17.440.
But what I’d like to know is, what if I don’t retire and just leave. Then claim my pension at 67 after freezing it for 7 years?
Will the 7 years I don’t claim for increase the value of my retirement pot and what can my pension prediction be without those 7 years?
if I stay in work until 67, my predicted pot is £28.000

Dazed_and_C0nfused

Maverick1251 said:

I have paid into my pension for 38 years and was hoping to retire at 60 thinking I would loose about 10% of my pension, but after getting a quote, I would actually loose 36% of what was predicted which works out at just over £10.000 per year. 

My yearly pension would only be £17.440.
But what I’d like to know is, what if I don’t retire and just leave. Then claim my pension at 67 after freezing it for 7 years?
Will the 7 years I don’t claim for increase the value of my retirement pot and what can my pension prediction be without those 7 years?
if I stay in work until 67, my predicted pot is £28.000

Your post is very confusing 

It sounds like a defined benefit pension in places but then you refer to a pot, which is usually a defined contribution pension.

Can you clarify exactly what type of pension this is?

If DB is it made up of more than one scheme?

Why do you think it would be "frozen"?  Is there no annual inflation increase?

Ayr_Rage

What type of pension do you have?

How a frozen pension is revalued annually until it is brought into payment depends on the scheme rules if it is DB scheme.

You'll have to ask your pension provider in any case.

PS. There is only one o in lose.

LHW99

How a frozen pension is revalued annually until it is brought into payment depends on the scheme rules if it is DB scheme.

And it almost certainly won't be "frozen" - just deferred. As said, the scheme rules will define how that revaluation is done, and if you have a DB pension with more than one section (eg NHS) it will depend on which section(s) you have as to which set(s) of rules it will fall under.

Marcon

Maverick1251 said:

I have paid into my pension for 38 years and was hoping to retire at 60 thinking I would loose about 10% of my pension, but after getting a quote, I would actually loose 36% of what was predicted which works out at just over £10.000 per year. 

My yearly pension would only be £17.440.
But what I’d like to know is, what if I don’t retire and just leave. Then claim my pension at 67 after freezing it for 7 years?
Will the 7 years I don’t claim for increase the value of my retirement pot and what can my pension prediction be without those 7 years?
if I stay in work until 67, my predicted pot is £28.000

That's quite high. Are you taking into account the fact that:

• you are taking the pension 7 years early, so it will be payable for longer; and
• just as importantly, you won't be building up any further benefits in the scheme between retirement at 60 and the scheme's Normal Retirement Age of 67.

If you leave employment, it will end your 'active' membership of this pension scheme, but it won't be frozen. It will 'revalue' (increase) each year until you access your benefits from the scheme. The only people who will be able to give you full details are the scheme's administrators.

Marcon

Dazed_and_C0nfused said:

Maverick1251 said:

I have paid into my pension for 38 years and was hoping to retire at 60 thinking I would loose about 10% of my pension, but after getting a quote, I would actually loose 36% of what was predicted which works out at just over £10.000 per year. 

My yearly pension would only be £17.440.
But what I’d like to know is, what if I don’t retire and just leave. Then claim my pension at 67 after freezing it for 7 years?
Will the 7 years I don’t claim for increase the value of my retirement pot and what can my pension prediction be without those 7 years?
if I stay in work until 67, my predicted pot is £28.000

Your post is very confusing 

It sounds like a defined benefit pension in places but then you refer to a pot, which is usually a defined contribution pension.

Can you clarify exactly what type of pension this is?

If DB is it made up of more than one scheme?

Why do you think it would be "frozen"?  Is there no annual inflation increase?

Hardly OP's fault. That's the terminology they are likely to have seen if they are in a public sector CARE scheme such as the NHS https://www.nhsbsa.nhs.uk/member-hub/understanding-your-benefits-2015-scheme

'Frozen' is also in common usage when someone leaves active membership of a scheme.

Many people posting questions here aren't familiar with the niceties of the jargon, and it isn't unreasonable that, having done their 'background reading', they use the terminology they've just been reading, believing it to be correct. Hopefully the more experienced posters responding to such questions will be able to move with the times, even if the temptation to revert to precision is overwhelming. Those days are gone...

Maverick1251

Sorry for the confusion, my pension is with GMPF and is local government authority with 38 unbroken years, when I said frozen.. I meant no longer contributing to it. 

When I said about the “pot” I meant that if I didn’t claim until I’m 67, would the £122.208 I haven’t had by not claiming at 60 be added to the value when I claim at 67

Marcon

Maverick1251 said:

Sorry for the confusion, my pension is with GMPF and is local government authority with 38 unbroken years, when I said frozen.. I meant no longer contributing to it. 

That's what most normal people mean, so no need to apologise!

Maverick1251 said:

 

When I said about the “pot” I meant that if I didn’t claim until I’m 67, would the £122.208 I haven’t had by not claiming at 60 be added to the value when I claim at 67

You'll receive a higher annual pension to reflect the fact your pension didn't come into payment at age 60. It's not quite a case of 'added to the value', more a case of increasing that figure in line with the rules of the scheme/inflation. 

DRS1

When I said about the “pot” I meant that if I didn’t claim until I’m 67, would the £122.208 I haven’t had by not claiming at 60 be added to the value when I claim at 67

The simple answer is no.

But you could think of it like this.  Ignoring pension increases if you take £17440 from age 60 and die at 90 then you have had £523200 of gross pension.  If you retire at 67 and take £28000 then and die at age 90 you will have had £644000 of gross pension.   That is about £121k difference
With pension increases the gap would be wider

Cobbler_tone

Dazed_and_C0nfused said:

Maverick1251 said:

I have paid into my pension for 38 years and was hoping to retire at 60 thinking I would loose about 10% of my pension, but after getting a quote, I would actually loose 36% of what was predicted which works out at just over £10.000 per year. 

My yearly pension would only be £17.440.
But what I’d like to know is, what if I don’t retire and just leave. Then claim my pension at 67 after freezing it for 7 years?
Will the 7 years I don’t claim for increase the value of my retirement pot and what can my pension prediction be without those 7 years?
if I stay in work until 67, my predicted pot is £28.000

Why do you think it would be "frozen"?  Is there no annual inflation increase?

My DB is frozen, until it comes into payment and has been since 2021. The reason I don't touch it is because of reduction factors.
Assuming this isn't the case with many schemes from what I've read on numerous threads on here?

BrilliantButScary

By retiring at 60, your pension is reduced by what is called an actuarial reduction or early retirement factor.
In the case of GMPF,  retirement 7 years prior to NRA  reduces the pension by 27.4% and the lump sum by 11.1%. Please see the following:

 https://www.gmpf.org.uk/members/retiring/early-retirement-factors

If you leave now, your pension will be deferred.

https://www.gmpf.org.uk/members/Retiring/access-your-benefits-on-hold


In answer to your last question, the answer is no you will not be paid the £17,440 per annum x 7 years = £122,080. What you will be paid is the unreduced pension and lump sum at 67, provided that is your NRA in the scheme.