LGPS pension statement "your pension is worth this much" vs "your pension at retirement"

ChasingtheWelshdream

I know this is probably a silly question, but could I check my understanding of my LGPS pension statement please? I may be leaving the employer soon and want to gather figures as part of some financial planning. 

My pensions portal has produced a personalised video with these statements. (I have rounded the figures and ignored any lump sums)

Statement A:  "Your pension as of 2024 is worth £5000 per year." 

Statement B: "When you retire at age 68 (2047) you will get £15000 per year, assuming there are no changes to your salary".

Where I am confused is, does this mean I can expect to receive 5K p/a in real terms in 2047, if I were to leave the scheme and not contribute further? But if I were to stay in my job until retirement, I would expect £15000?

Or, does it mean my pension is currently worth £5k p/a in today's money. Even if I were not to contribute further, inflation etc means that £5k becomes £15000 in 2047?

I hope that makes sense. I am just trying to see what my pension may be at retirement age,  if I leave my job now. 

 

Silvertabby

It means that you have accrued a pension of £5K per year as at 31 March 2024.

The future quote of £15k assumes that you will continue working/contributing to the scheme until NRA/SPA 

If you were to leave now, then your pension accrued to your date of leaving will be deferred (a little more than £5K).  Then, if taken at NRA/SPA, it will be this £5K plus annual cost of living increases to SPA.  

If you leave now, and then take your benefits from (currently) age 55, they would be subject to early payment reductions.

ChasingtheWelshdream

Thank you, that is so helpful!

Just to be clear that I am understanding correctly, for my purposes I need a snap-shot of my current pension provision at age 68, in today's money (so I can equate it to my current cost of living).

So I have a current state pension forecast of (£10,000 ish), and I can add a guaranteed £5000 p/a from my LGPS, which gives me approx £15000 p/a as a starting point from which to plan the next 25 years. I think I have that right?

Are you able to help with one other question @Silvertabby please?

I now have 2 positions with my employer, one substantive and another zero hours which is a much lower grade. I receive a pension statement for each.  

I have some pre-2014 final salary elements in the above forecast which relates to my substantive, although not a great deal as I was not working many hours at the time. 

If I left my substantive/salaried role but kept the zero hours and worked sporadically, would this affect anything?
 

Silvertabby

ChasingtheWelshdream said:

Thank you, that is so helpful!

Just to be clear that I am understanding correctly, for my purposes I need a snap-shot of my current pension provision at age 68, in today's money (so I can equate it to my current cost of living).

So I have a current state pension forecast of (£10,000 ish), and I can add a guaranteed £5000 p/a from my LGPS, which gives me approx £15000 p/a as a starting point from which to plan the next 25 years. I think I have that right?

Are you able to help with one other question @Silvertabby please?

I now have 2 positions with my employer, one substantive and another zero hours which is a much lower grade. I receive a pension statement for each.  

I have some pre-2014 final salary elements in the above forecast which relates to my substantive, although not a great deal as I was not working many hours at the time. 

If I left my substantive/salaried role but kept the zero hours and worked sporadically, would this affect anything?
 

Your main post pension record would be deferred, and your zero hours would just carry on as it is.  Your salary from one won't affect the other.

ChasingtheWelshdream

Brilliant, thank you.