Superannuation early retirement

Cobbler_tone

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

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?

That seems a bit unlikely - when did you leave 'active' membership of the scheme ('active' means you were still employed by the relevant employer and building up benefits within your DB scheme)? Why do you think it really is 'frozen' in the 'isn't increasing at all' sense of the word, which seems to be what you are suggesting?

You clearly haven't reached the scheme's normal retirement age, and unless you left prior to 1 January 1985 and the scheme was contracted in, I'd expect statutory revaluation to be doing its bit.

I'm still employed by the same company and it closed in 2021, switching to an alternative DC scheme.
I track it closely and TBF it is a really good portal, which I have calibrated with written quotes. The salary used is the salary I was on when it closed.

The only time it changes is by changing the dates, i.e. it increases the longer you leave it as you'd expect. Then the scheme rules cite increases once in payment, capped by RPI/CPI at 5%/2.5% before/after 2010. 
I confirmed this with the Trustee's for the correct understanding. 

So it isn't 'frozen' in the 'doing absolutely nothing'(!) sense of the word - it's revaluing in deferment, as you'd expect. 

Yes, cross purposes. If it was truly doing nothing I would be taking it! The point I was trying to make was that increases using RPI/CPI only kick in once the pension is in payment. The current increases are because I am not taking it early.

Marcon

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

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?

That seems a bit unlikely - when did you leave 'active' membership of the scheme ('active' means you were still employed by the relevant employer and building up benefits within your DB scheme)? Why do you think it really is 'frozen' in the 'isn't increasing at all' sense of the word, which seems to be what you are suggesting?

You clearly haven't reached the scheme's normal retirement age, and unless you left prior to 1 January 1985 and the scheme was contracted in, I'd expect statutory revaluation to be doing its bit.

I'm still employed by the same company and it closed in 2021, switching to an alternative DC scheme.
I track it closely and TBF it is a really good portal, which I have calibrated with written quotes. The salary used is the salary I was on when it closed.

The only time it changes is by changing the dates, i.e. it increases the longer you leave it as you'd expect. Then the scheme rules cite increases once in payment, capped by RPI/CPI at 5%/2.5% before/after 2010. 
I confirmed this with the Trustee's for the correct understanding. 

So it isn't 'frozen' in the 'doing absolutely nothing'(!) sense of the word - it's revaluing in deferment, as you'd expect. 

Yes, cross purposes. If it was truly doing nothing I would be taking it! The point I was trying to make was that increases using RPI/CPI only kick in once the pension is in payment. The current increases are because I am not taking it early.

No - the current increases are because pensions have to be revalued in deferment by at least statutory revaluation (or better than that if the scheme rules provide for something higher).

Cobbler_tone

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

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?

That seems a bit unlikely - when did you leave 'active' membership of the scheme ('active' means you were still employed by the relevant employer and building up benefits within your DB scheme)? Why do you think it really is 'frozen' in the 'isn't increasing at all' sense of the word, which seems to be what you are suggesting?

You clearly haven't reached the scheme's normal retirement age, and unless you left prior to 1 January 1985 and the scheme was contracted in, I'd expect statutory revaluation to be doing its bit.

I'm still employed by the same company and it closed in 2021, switching to an alternative DC scheme.
I track it closely and TBF it is a really good portal, which I have calibrated with written quotes. The salary used is the salary I was on when it closed.

The only time it changes is by changing the dates, i.e. it increases the longer you leave it as you'd expect. Then the scheme rules cite increases once in payment, capped by RPI/CPI at 5%/2.5% before/after 2010. 
I confirmed this with the Trustee's for the correct understanding. 

So it isn't 'frozen' in the 'doing absolutely nothing'(!) sense of the word - it's revaluing in deferment, as you'd expect. 

Yes, cross purposes. If it was truly doing nothing I would be taking it! The point I was trying to make was that increases using RPI/CPI only kick in once the pension is in payment. The current increases are because I am not taking it early.

No - the current increases are because pensions have to be revalued in deferment by at least statutory revaluation (or better than that if the scheme rules provide for something higher).

As a minimum it’ll be a combination of both. e.g. the TFLS increases £600 a month I leave it, along with small monthly pension increases. I assume you mean there is an additional annual increase, in which case the Trustees misinformed me, which TBH doesn’t surprise me and not the first time I’ve been given duff info.

On the bridging pension they told me the whole lot increased when in fact it doesn’t. The current state pension amount is added (at flat rate at the time the bridging option is started) until retirement age, whilst the DB bridged part (i.e. lower than full DB pension alongside the state pension equivalent) increases in line with the rules. At the date the actual state pension kicks in, the equivalent of today’s state pension drops off and the original lower DB continues growing. It takes some modelling! I had a 40 page document to decipher that one.

Thanks for clarifying.

Marcon

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

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?

That seems a bit unlikely - when did you leave 'active' membership of the scheme ('active' means you were still employed by the relevant employer and building up benefits within your DB scheme)? Why do you think it really is 'frozen' in the 'isn't increasing at all' sense of the word, which seems to be what you are suggesting?

You clearly haven't reached the scheme's normal retirement age, and unless you left prior to 1 January 1985 and the scheme was contracted in, I'd expect statutory revaluation to be doing its bit.

I'm still employed by the same company and it closed in 2021, switching to an alternative DC scheme.
I track it closely and TBF it is a really good portal, which I have calibrated with written quotes. The salary used is the salary I was on when it closed.

The only time it changes is by changing the dates, i.e. it increases the longer you leave it as you'd expect. Then the scheme rules cite increases once in payment, capped by RPI/CPI at 5%/2.5% before/after 2010. 
I confirmed this with the Trustee's for the correct understanding. 

So it isn't 'frozen' in the 'doing absolutely nothing'(!) sense of the word - it's revaluing in deferment, as you'd expect. 

Yes, cross purposes. If it was truly doing nothing I would be taking it! The point I was trying to make was that increases using RPI/CPI only kick in once the pension is in payment. The current increases are because I am not taking it early.

No - the current increases are because pensions have to be revalued in deferment by at least statutory revaluation (or better than that if the scheme rules provide for something higher).

As a minimum it’ll be a combination of both. e.g. the TFLS increases £600 a month I leave it, along with small monthly pension increases. I assume you mean there is an additional annual increase, in which case the Trustees misinformed me, which TBH doesn’t surprise me and not the first time I’ve been given duff info.

Nearly there but not quite!  There's no additional annual increase.

The pension you are looking at if you took it 'now' has been reduced to reflect the fact it is being paid early (ie before the scheme's Normal Retirement Age). As time goes on, that reduction will decrease because you're getting closer to the scheme's NRA, and it's the lower reduction that is giving the appearance of the pension 'increasing'.

The actual increases are coming from revaluation in deferment.

I'm not trying to labour a point for the sake of it, but rather because in fairness to your trustees, I think they've given you correct information.

Cobbler_tone

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

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?

That seems a bit unlikely - when did you leave 'active' membership of the scheme ('active' means you were still employed by the relevant employer and building up benefits within your DB scheme)? Why do you think it really is 'frozen' in the 'isn't increasing at all' sense of the word, which seems to be what you are suggesting?

You clearly haven't reached the scheme's normal retirement age, and unless you left prior to 1 January 1985 and the scheme was contracted in, I'd expect statutory revaluation to be doing its bit.

I'm still employed by the same company and it closed in 2021, switching to an alternative DC scheme.
I track it closely and TBF it is a really good portal, which I have calibrated with written quotes. The salary used is the salary I was on when it closed.

The only time it changes is by changing the dates, i.e. it increases the longer you leave it as you'd expect. Then the scheme rules cite increases once in payment, capped by RPI/CPI at 5%/2.5% before/after 2010. 
I confirmed this with the Trustee's for the correct understanding. 

So it isn't 'frozen' in the 'doing absolutely nothing'(!) sense of the word - it's revaluing in deferment, as you'd expect. 

Yes, cross purposes. If it was truly doing nothing I would be taking it! The point I was trying to make was that increases using RPI/CPI only kick in once the pension is in payment. The current increases are because I am not taking it early.

No - the current increases are because pensions have to be revalued in deferment by at least statutory revaluation (or better than that if the scheme rules provide for something higher).

As a minimum it’ll be a combination of both. e.g. the TFLS increases £600 a month I leave it, along with small monthly pension increases. I assume you mean there is an additional annual increase, in which case the Trustees misinformed me, which TBH doesn’t surprise me and not the first time I’ve been given duff info.

Nearly there but not quite!  There's no additional annual increase.

The pension you are looking at if you took it 'now' has been reduced to reflect the fact it is being paid early (ie before the scheme's Normal Retirement Age). As time goes on, that reduction will decrease because you're getting closer to the scheme's NRA, and it's the lower reduction that is giving the appearance of the pension 'increasing'.

The actual increases are coming from revaluation in deferment.

I'm not trying to labour a point for the sake of it, but rather because in fairness to your trustees, I think they've given you correct information.

So that is what was implied originally but maybe not explained clearly. The increases in CPI/RPI don’t happen until it’s in payment. The increase in deferment down to timing.

Maverick1251

Sarahspangles said:

Maverick1251 said:

I think I’ve finally got my head round what I’ve been advised!
But does anyone have an idea how much my pension could be if I put it on hold at 60 and cash in at 67
my current estimated final salary pension if I remain until 67 is £26.800
I don’t need my pension yet but have an opportunity in a new role which would mean I would have to leave gmpf.
But I don’t want to take on the new role if it takes too much from a pension I've worked really hard for.

It’s better to use the correct terms. If you leave for a new non-LGPS role, your pension will be deferred. You then ‘commence’ or draw your pension at a later date. In particular ‘cashing in’ implies something very different!

While you are a deferred member, your pension will be annually revalued to keep pace with inflation. You will get an annual statement telling you what you will get. They can’t take it away from you.

You might be missing out on some money though if you don’t commence your pension at 60. There are implications if you draw a pension while still working, like potentially earning enough to pay higher rate tax. Maybe someone will work it out for you if you say what your pension is at 60 versus your planned retirement age, and a ballpark of the salary from the job you’re interested in.

Sorry.. I have no clue what terms I should be using!
I seem to have two options
1 stay with my current employer until 67 
2. Leave my job and defer my pension until 67

i was trying to get an idea of what value my pension would have if I defer it and make no contributions for 7 years
The new role if I took it would not have a pension as I would be self employed. 
If I’ve read my forecast correctly, the current value of my pension is approx £19.990 before reductions, so I assume in 7 years it would be similar with some added on by inflation 

QrizB

Maverick1251 said:

If I’ve read my forecast correctly, the current value of my pension is approx £19.990 before reductions, so I assume in 7 years it would be similar with some added on by inflation 

Yes. If your accrued pension to date is £19990 pa at your normal pension age, you can expect to receive £19990 pa increased by inflation when you get there.

In your first post you said £17k was £10k less than forecast. Was that £27k forecast including the future accruals that you wouldn't otherwise make if you retired early?