Timing Issue on taking Deferred LGPS

billywhizz1966

I reach the magic age of 60 in late February next year when I can and will start to draw my LG deferred pension hopefully for many years to come

I have used the on line calculator so know what I am entitled too

My question is - is there any advantage in waiting for the new financial year before taking it as not sure if this will increase my lump sum by any yearly uprating or if this is something I have dreamt up !!!!     

My figures if it helps as I am taking the larger TFLS are

£29582 and £197216 if take from March onwards

or

£29617 and £197675 if take from April onwards

If no difference may as well have from March onwards but wanted to check if anyone can help please 

Silvertabby

billywhizz1966 said:

I reach the magic age of 60 in late February next year when I can and will start to draw my LG deferred pension hopefully for many years to come

I have used the on line calculator so know what I am entitled too

My question is - is there any advantage in waiting for the new financial year before taking it as not sure if this will increase my lump sum by any yearly uprating or if this is something I have dreamt up !!!!     

My figures if it helps as I am taking the larger TFLS are

£29582 and £197216 if take from March onwards

or

£29617 and £197675 if take from April onwards

If no difference may as well have from March onwards but wanted to check if anyone can help please 

The difference between the two sets of figures is down to the lesser early retirement reductions.

You may wish to consider not taking your pension until after 6 April,  which is when the annual cost of living increases are applied to deferred benefits.  Taking your benefits from March won't affect your annual pension, as the increase would just be applied from 6 April, but your lump sum would be history.  Next April's CPI increase will be as at the end of this September, but the latest increase (end of June) is 3.6%.  Anything remotely like that will make a noticeable difference to a large lump sum like yours.  

P.S.  Before anyone chips in, some (but by no means all !) LGPSs pay 'second bite' arrears  in respect of the lump sum.  Worth checking if your LGPS does before making a final decision.  

billywhizz1966

That's great #Silvertabby. Thanks very much for confirming what I had remembered. If it does say stay at 3.6 % is that what I need to add to the current lump sum figure or is it a different calculation. Definitely seems worth waiting and taking immediately after the 6 April but will ask the question when I instruct to release my pension. 

Silvertabby

billywhizz1966 said:

That's great #Silvertabby. Thanks very much for confirming what I had remembered. If it does say stay at 3.6 % is that what I need to add to the current lump sum figure or is it a different calculation. Definitely seems worth waiting and taking immediately after the 6 April but will ask the question when I instruct to release my pension. 

It's not as simple as adding 3.6% to your total commuted lump sum.  You would have to add it to your original figures (both pension and lump sum) and then re-do the commutation calculation.  Still worth having, though!