Being made redundant
billpaul812
Posts: 67 Forumite
Hope this is the right forum for this advice request, please advise if not.
I'm a member of the LGPS and am being made redundant nearly 4 years before my NRA. This leaves me approx 5K short of my projected final pension of £30K, quite a wack. I'm prepared to carry on working but locality is such that I feel its unlikely that I will get a job with access to the LGPS.
Any advice on what I can do for the best please in terms of maximising post retirement income.
Thanks.
BP
I'm a member of the LGPS and am being made redundant nearly 4 years before my NRA. This leaves me approx 5K short of my projected final pension of £30K, quite a wack. I'm prepared to carry on working but locality is such that I feel its unlikely that I will get a job with access to the LGPS.
Any advice on what I can do for the best please in terms of maximising post retirement income.
Thanks.
BP
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Comments
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How much redundancy pay will you receive?
Could you plug this into a private pension, withdraw 25% tax free and drawdown the balance as income until your nearer 60, thus leaving your LGPS pension to grow a little?0 -
I am 62 NRA is 66.
My redundancy lump sum is £60 odd K, of which £30K is tax free. I've been told the cheque will be north of £50K.
What is (or how do i find out) what my LGPS pension will grow by without contribution?0 -
https://www.kentpensionfund.co.uk/local-government/current-member-paying-in/retirement-in-the-lgps/early-retirement-on-the-grounds-of-redundancy-or-efficiency
You are aged over 55 and have more than two years membership.
Does below apply to you?
Your benefits are payable immediately based on your membership up to the date you leave employment. Your benefits are not reduced for being paid early.
Your employer may also enhance your benefits at their discretion. Your employer can award you with up to £6,755 extra annual pension. This is a discretion your employer can use if they so wish and they will publicise their policy on this for your information.
As a current member over age 55, paying into the Scheme, you must take benefits due to you if you are retired early on the grounds of redundancy or business efficiency.0 -
I don't understand this bit. Your benefits are payable immediately based on your membership up to the date you leave employment. Your benefits are not reduced for being paid early.
My pension estimate shows that if I take it Dec 2017 then it will be around £5K lower than if I take it at my NRA which is about 4 years away.0 -
billpaul812 wrote: »I don't understand this bit. Your benefits are payable immediately based on your membership up to the date you leave employment. Your benefits are not reduced for being paid early.
My pension estimate shows that if I take it Dec 2017 then it will be around £5K lower than if I take it at my NRA which is about 4 years away.
but it will have an annual increase even when in payment...slap your Dec 17 figure into a compound interest calculator, and use, say, 2.5% over the 4 years...how much difference is there then??......Gettin' There, Wherever There is......
I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple
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"but it will have an annual increase even when in payment...slap your Dec 17 figure into a compound interest calculator, and use, say, 2.5% over the 4 years...how much difference is there then??"
Forgive me I'm probably being thick here, but during those 4 years my projected NRA figure would have increased too wouldn't it?0 -
billpaul812 wrote: »"but it will have an annual increase even when in payment...slap your Dec 17 figure into a compound interest calculator, and use, say, 2.5% over the 4 years...how much difference is there then??"
Forgive me I'm probably being thick here, but during those 4 years my projected NRA figure would have increased too wouldn't it?
it depends if the figures you have been given at NRA included an estimated increase or not....someone like SilverTabby may be better placed to advised how LGPS does this
......Gettin' There, Wherever There is......
I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple0 -
What was your LGPS pension value as at 31/03/17 based on your last statement?
You will get that plus approx 8/12ths of the annual CARE amount you earn each pension year if you go in December 2017, plus a s light increase based on the April 1% payrise possibly.
This will be less than the anticipated Age 65/66 amount because you will have a few years less CARE pension building up but it won't be reduced for Early Retirement.
What you could look at doing is paying as much as you can into the LGPS AVC scheme between now and December, including any redundancy over the £30k tax free bit.
You can then take the whole AVC pot tax free as part of your 25% Pension Commencement Lump Sum at the point you start your LGPS pension.
You should be able to get the whole redundancy payout into your account tax free that way by the sound of it.0 -
billpaul812 wrote: »I don't understand this bit. Your benefits are payable immediately based on your membership up to the date you leave employment. Your benefits are not reduced for being paid early.
My pension estimate shows that if I take it Dec 2017 then it will be around £5K lower than if I take it at my NRA which is about 4 years away.
No, you are over 55 and therefore eligible for immediate unreduced payment of your LGPS built up to the date of departure.
AlanP has also demonstrated how to get all your redundancy out tax-free.0 -
Thank you all but I never understand what you mean by unreduced?0
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