Claim now or wait until the new tax year

Marcon

[Deleted User] said:

Thank you, that's cleared my rather muddled mixed up original question...
He will also have the option to draw down on a second pension but i think he's also going to do this as a monthly option too ....as and when he decides to start accessing that one too, the last pension is a smaller one, he was thinking of cashing that in, in full or possibly transferring it into the other pension that offers draw down, so will look into that option.

Pause for breath...then have a look at https://www.moneyhelper.org.uk/en/pensions-and-retirement which gives lots of basic information.

A free PensionWise appointment (follow the relevant link on the link I've given) might be very helpful.

[Deleted User]

Brie thanks for the heads up,
 we did think if we should apply earlier and if there was an option to put a commencement date on his form, so do  we put the date as of 7th April ? Is that correct and put him into the new tax year or do we need to go later say 10th - 14th...and will this also be the date that they will pay his tax free lump sum, or can that be taken first then a date applied for his monthly payments?

[Deleted User]

Thank you Marcon I'll take a look at the link you provided 

Marcon

[Deleted User] said:

Hi all, question please if I may , my OH has took early retirement as of last month. He has 3 pensions, one of which has a monthly amount paid for life. 

Has he taken early retirement from a job which offers the defined benefit pension (the one which pays monthly)? If so, he'll already have agreed a start date for the DB pension as part of the early retirement process.

If the DB pension is from a job he's already left, then he needs to check his options with the scheme's administrators. The scheme will have a Normal Retirement Age and if he wants to take his DB pension starting at a different age, he's likely to have to ask to take it early (or late) as the case may be.

[Deleted User]

Marcon, this pension that offers the monthly payments, was one he was in years ago, it was part of his company, but the company changed pension providers so everyone that was in this pension scheme had their pensions frozen, it's been that way ever since, they are proving to be very slow at responding to his enquiries, but I'm sure he told them what age he wanted to retire at, but I also think he has the option to extend this. His second pension is a private one he can continue to pay into and his third smaller one is the one that he's been paying into out of his wages as a works pension.

Brie

[Deleted User] said:

Marcon, this pension that offers the monthly payments, was one he was in years ago, it was part of his company, but the company changed pension providers so everyone that was in this pension scheme had their pensions frozen, it's been that way ever since, they are proving to be very slow at responding to his enquiries, but I'm sure he told them what age he wanted to retire at, but I also think he has the option to extend this. His second pension is a private one he can continue to pay into and his third smaller one is the one that he's been paying into out of his wages as a works pension.

It sounds like the company did what many did years back.  Freeze a defined benefit scheme and replace it with a defined contribution one.  So do check the details on the DB scheme as Marcon has suggested.  DB schemes sometimes had a NRD of 60 or 65 though some had others.  It's good to know that if he's going to hit the crucial NRD in say June next year that might be the best time to take it so he doesn't lose out. 

Also check for options that might include you getting a pension should anything happen to him (dog forbid!) in X number of years.  My DB will pay out a set amount to my OH for life should I kick the bucket first.  I'm trying to set up an annuity with a DC scheme that will pay out no matter what for 25 years, so I'll get it, then possibly the OH and then some niece or nephew perhaps.

[Deleted User]

Brie, this particular pension is paid for life, I will also get a full state pension, but he has me named as a beneficiary on all three pensions, we might add others where possible incase I pop off first. Financially though I think we are sound 😉

[Deleted User]

He retired last month aged 60

[Deleted User]

Ok so it says date of retirement used for quotation was his
60th birthday last month 2025
NRD is November 2030
Also an option to choose a lower 25% tax free amount for a larger monthly payment, or no 25% tax free amount at all.
I assume this is a standard option. 

MallyGirl

[Deleted User] said:

Ok so it says date of retirement used for quotation was his
60th birthday last month 2025
NRD is November 2030
Also an option to choose a lower 25% tax free amount for a larger monthly payment, or no 25% tax free amount at all.
I assume this is a standard option. 

His pension will be reduced for earlier than NRD commencement. Can he not delay claiming that one and live off the others?
The tax free amount for a DB pension is based on the scheme rules - not necessarily 25% at all.
25% is only relevant for DC pensions.
There is often the chance to take less tax free in exchange for a bigger monthly income. Do you need the tax free lump sum?