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Deffered benefit pension scheme Fluctuations in growth
I have a deferred defined benefit scheme (final salary) which I have been receiving annual retirement quotations from on retirement income. So that I can plan my retirement accordingly.
I have noticed that over the past 8 years, the value of my 25% tax free lump sum plus income, and 100% income option has gone up and down a considerable amount.
This doesn't seem to make any sense, as I was under the impression that it should increase with inflation at a bare minimum.
For example: my 2023 staement has a sum of £74k lump sum, with £11,155 a year, whilst my 2026 statement has a lump sum of £71k with £10,746 a year.
Please can you help me understand this, as it makes retirement planning somewhat hard
Comments
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Are you impacted by the McCloud remedy?
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I'm not sure what that is, not heard of this
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You are more likely to get some good feedback if you give more detail. Like who is the employer involved?
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Ive looked on this forum and McCloud remedy seems to relate to NHS pensions, which mine is not. Mine is a Royal London pension
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Did you work for Royal London?
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Sounds like there could be a money purchase element involved - did you pay Additional Voluntary Contributions? If so, that would explain why you are getting annual statements (private sector schemes don't usually issue them in respect of deferred final salary benefits).
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
Do you have an option to take an increased income and no tax free cash ? Has that shown the same problem ? If it hasn't then it means your commutation factors (the factor that determines how much tax free cash you get for giving up income) have probably be revalued. Unfortunately, the trustee's have a right to do this.
Mine have changed at least 3 times since I have been asking to know them, once they increased, and twice they have decreased.
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Nothing unfortunate about it - as you say, sometimes it increases, sometimes it decreases as market conditions fluctuate - but it doesn't explain why the '100% income' has gone up and down, as OP says in their opening post. The factors have no impact on that.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!2 -
my predicted pension used to vary a bit based on the final salary at that time
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Ahh missed that they had already answered my question in their OP.
I knew somebody was going to pull me for the unfortunately comment, I meant to not leave that in.
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