Every time I get a quote for my modest DB pension - it has gone down.

RogerPensionGuy

To the OP.

Reference taking it at age 55, can I ask how far away is age 55 from your age today?

One item that popped in my head, I think RPI for pensions and stuff is mostly changing to CPIH in 2030ish and IIRC this is something like 0.5% below RPI, so this change will be just another watering down we will mostly just soak up.

Cheers Roger.

silvercue

https://forums.moneysavingexpert.com/discussion/comment/82094036#Comment_82094036

Hi there. I have just recently turned 55. I have asked for a quite a cpl months on from now

sammyjammy

https://forums.moneysavingexpert.com/discussion/comment/82085880#Comment_82085880

I was referring to scheme pension age, sorry should have been clearer

snowlaser

It sounds like perhaps the early retirement reduction factors have been updated. If they had changed from 4%pa per annum to 5% pa (say) and you're retiring 10 years early (55 to 65) then that 1% pa difference could lead to a 10% reduction over 10 years.

kevwallis

https://forums.moneysavingexpert.com/discussion/comment/82095039#Comment_82095039

I’ve just checked my figures on pension point, it looks like they have up dated the early retirement reduction factors, I screenshot shot a couple of quotes a while back ….I’ve re run the same dates and mine have reduced to the amount I was expecting.

MyRealNameToo

My background is annuities, so post buyout pensions, for us 99% of early retirement calcs are done on a cost neutral basis. Therefore calculate the net present value of your payments based on normal retirement age and then backwardly solve what starting pension value achieves the same net present value for early/late retirement.

Calculations are done using various tables/assumptions - longevity, longevity improvements, inflation, discounting etc. These are all reviewed fairly frequently, for example the two longevity pair were looked at quarterly, discounting monthly etc and so impacts can be fairly material over a relatively short period of time which is why quotes normally have a 1 month duration.

Pensions in principle can do the same, some prefer to simply matters and have a single standard discount rate thats reviewed periodically where as some are closer to insurers who may vary rates more frequently and at a more granular level than a single whole scheme rate.

Some pension schemes operated on a subsidised basis, so early retirement may be planned to give you more money overall but these more generous options are often subject to trustee approval as clearly they dont want to bankrupt the scheme by subsidising too many early retirements now.