LGPS scheme

SteveJW wrote: »

Back in 2014 I asked a similar question, things have now moved on


Male 66 Early last April, decided to carry on working at 65, time was not right and I enjoyed what I was doing. Feel that now is the time to go.

Have been in a LGPS since I was 21

Now it is decision time

I can take part of my pension as a lump sum (£12 for every £1), I understand this is not a good rate
Everone looks at this simplisticly, that you have to receive your pension for 12 years to receive the same amount
In reality inflation comes into play, reducing the value of the lump sum also the pension goes up.

I have free standing AVCS with the Pru, which I intend taking as a lump sum

The LGPS basic lump sum together with the money from the Pru should be sufficient for my future needs. So I don't think I need to increased the lump sum any further

How long do I have to live to make the pension a better proposition
Anyone got an Excel spreadsheet that lets you play with the figures

Are sure that your AVCs are free standing? By quoting them in the same breath as your LGPS pension, they sound more like in-house AVCs, making them much more flexible. ie, you can use all or some of them to buy extra pension in the LGPS if pension rather than lump sum is your priority. However, if they are indeed free standing then you won't be able to take them all as tax free cash - just the first 25%, like any other private DC pension.

Yes, the 1:12 commutation rate isn't particularly attractive - but it depends on what you are going to use the money for. For example, if you still have a mortgage it could work out beneficial to clear that with all or part of the commuted lump sum. Horses for courses.

I'm not aware of a commutation spread sheet (unless anyone out there can say otherwise?) but rule of thumb break-even point is 12 to14 years. So, if you die within 12/14 years of retirement you'd have been better off with the maximum lump sum and smaller pension, but the longer you live beyond the 12/14 year point the better off you'd be with the smaller lump sum and bigger pension.

SteveJW wrote: »

Silvertabby
Thanks for the response, possibly I'm mistaken with the AVCs, the pension quote I have received from my employer states I can take the money from the AVCs as a lump sum.
No mortgauge, or major comitments
By my calculations, I will be able to continue with my present lifestyle using my works and OAP pensions.

Then no worries - you have in-house AVCs. Enjoy your retirement!