Quick sense check for my brother's fire service pension options

HedgehogRulez

Hi

My brother is being made ill health retired at 49 from the fire service (bad back) - below is snapshot of benefit options. It looks pretty clear to me which option he should take, but just want to check that there's only one real sensible option….

I believe he has a choice of being in Legacy or Reformed Benefits plan:

My thoughts is remain in Legacy Scheme and take no lump sum.

Thanks

MallyGirl

what are the different terms for legacy and reformed - annual increases based on?, survivors pension?

Does he need any lump sum?

flaneurs_lobster

I'd be talking to his FBU rep, they'll hopefully have contacts for pension guidance.

HedgehogRulez

He's in the process of getting divorced. One child aged 14.

Linton

You could do crude calculations of total income if your brother lives to say 90, but I think that is missing more important factors.

In my view his best option depends on how much income your brother needs to enjoy an acceptable standard of living, his current savings, and his post-FB plans.

For example he could take on a less strenuous job and live happily on the wages plus a lower Pension, knowing that SP would be paid in about 20 years. Also ongoing employment would provide additional pension. I assume he would need to pay further NI to get a full State Pension. He may have currently no savings at all. Under those circumstances a significant lump sum now could give more flexibility than a higher income.

Rather than coming to a snap decision a sensible next step could be to write down a life plan of income and expenditure over time. He is lucky in that he would not seem to have to worry about inflation.

flaneurs_lobster

He is lucky in that he would not seem to have to worry about inflation.

That "no annual increase until age 55" warrants attention.

HedgehogRulez

thanks all. Just to add he recently started as a park ranger £27k salary and no real need of the lump sum atm. He will also have a not insignificant inheritance from elderly parents at some point (old money)

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/82103932#Comment_82103932

Not applicable in the case of ill health - cost of living increases will be applied from day 1.

RogerPensionGuy

https://forums.moneysavingexpert.com/discussion/comment/82103834#Comment_82103834

I certainly very agree this post.

A 49 year old should take good advice from all sources available, his health may get worse, he may live in to old ago with poor health.

Nice slow decisions being well informed is a fair signpost IMHO.

poseidon1

Forgive me if I have missed something here.

You say as well as well as retiring on ill health grounds your brother is also getting divorced. If the financial settlement with his wife as yet to be agreed and settled, surely the pension quotes maybe subject to change if there is ultimately a sharing order?.

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/82104285#Comment_82104285

As he's been awarded an ill health retirement pension, it must be taken when due and can't be deferred pending the outcome of his divorce settlement. At the appropriate time, he will need to ask Fire Service pension for a CETV for divorce purposes (stressing that it is for divorce purposes). It matters not that the pension is already in payment - it's just a way more complicated calculation.