Is this true taking nra 60 early?

[wolfman]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

[derricksmyth]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

Under the impression you lose 5 percent for every year before 60 , and then they give the 25 percent lump sum after that.

[Jefferson Starfish]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

Why are they phoning HR?
Surely it's Capita or the PSC you should be contacting. They are the pension administrators!

[vmaxv4]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

Definitely not the situation when I took my pension at 58 also with 39yrs service.
I would contact PSC to get clarification..
Several colleagues have recently had pension quotes & their reduction is in line with what you have already thought.

[wolfman]

Thanks for the reply people appreciate it. I thought they should be calling Capita after I looked into it a bit more today. Will definitely contact PSC to confirm this. I've never heard of this and been checking these messages board threads for years.

[wolfman]

Just confirmed after contacting PSC. you lose 5% per year with your lump sum and monthly pension as originally thought. So I would lose 10% of both if taking it at 58. Thanks again for replies.

[vmaxv4]

[rambo1]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

Are you sure that'd be better than hanging on until 60? On your service you must be talking about giving away over £20k over the next 10 yrs.

[NWpostie]

Hi hope someone can clarify this. I'm thinking of taking my pension at 58. Been with Royal mail 39 years. Was prepared to take the 10% reduction. Have been told today by a reliable source that if I take it at 58 I will lose 10% of my monthly pension but the full 25% of your lump sum. It doesn't matter when you take your pension, if it's before 60 you will lose 25% of your lump sum, whether you take it at 55 or 59. They rang HR apparently and they confirmed this. Can this be true? Thanks for any replies.

Are you sure that'd be better than hanging on until 60? On your service you must be talking about giving away over £20k over the next 10 yrs.

I agree hang on til you're 60 use the time to build up cash reserves in a interest savings account as well so you will have something to go along with your lump sum.

[wolfman]

Thanks for your opinions Rambo & nwpostie appreciate it. Is it really that much £20k over 10 years I haven't done the sums yet as I'm about 10 months from 58. Its made me think though. I think my last statement was just over 10k per year and about £38k lump sum. Would have to check numbers though.

[derricksmyth]

Thanks for your opinions Rambo & nwpostie appreciate it. Is it really that much £20k over 10 years I haven't done the sums yet as I'm about 10 months from 58. Its made me think though. I think my last statement was just over 10k per year and about £38k lump sum. Would have to check numbers though.

Not sure but wouldn't you have to take off the 24 months you would be drawing the pension before 60 , to get the total loss . For example £20 k- (24 × 400)= £10600 loss.


That's assuming you got £400 a month for examples sake?

[RobertT]

Thanks for your opinions Rambo & nwpostie appreciate it. Is it really that much £20k over 10 years I haven't done the sums yet as I'm about 10 months from 58. Its made me think though. I think my last statement was just over 10k per year and about £38k lump sum. Would have to check numbers though.

Based on those figures and not factoring in inflation, you would get over the next 10 years(age 58-68):

1. By taking your NRA60 2 years early – a total of £90k in pension + £34k lump sum.
2. By waiting until 60, you'll only draw your pension for 8 years, in which case you'll get £80k + £38k lump sum.

So over 10 years it's better to take it early.

But a pension needs to provide an income high enough to live on and for the rest of your life - the higher that income, the better the position you'll be in. Particularly pertinent at the moment considering the cost of living crisis.

By the time you hit age 74, you'll be at break even level and from then on, it will have been a better decision to have waited until 60.

A majority of pensioners live to well past 74 and the average life expectancy of a 58 year old man today is 84.
Figures from the RMPP and RMSPS suggest the life expectancy of postal workers is roughly equal to the national average.

Ultimately whether it's a good decision to take your pension early is a very individual one, because you're making a life choice as well as a financial one. But purely from a money perspective and based on averages, it's usually better to wait until NRA.

[wolfman]

Thanks Robert and Derrick you guys are really helpful. Robert that's a great explanation its helped me a lot. I know loads of people who are taking there pension at 55, way more than people waiting until 60 and I can see their point of view if they want to enjoy it while they are relatively young, but most people will be better of leaving until they are 60 and as you say it's an individual choice. I will double check my figures later when I get chance. Thanks again everyone for your opinions and advice

[rambo1]

Okay, £20k was a bit on the high side, thought 39yrs would give more than your figures. I meant over the first 10yrs of drawing your pension as opposed to Roberts next 10 yrs scenario. In which case going at 58 will be about £14k less for you over those first 10yrs . Of course you have to also consider that if you're getting an extra £1k a yr if you take it at 60, then assuming you pay tax, thats actually only £800 more. Lots to consider. As Robert said, you are effectively setting your pension rate of pay for the rest of your life although it will be revalued each yr. It's all a question of how much you need really. As Robert worked out there is (a bit morbidly) a'break even' age you have to reach from which point you're on a winner. When you factor a full state pension if you've qualified, added to your work one, when you get to 66/67 whichever it is, then that's over £20k at today's money.

[wolfman]

Thanks for that Rambo. Those figures are just for my nra 60 pension built up until 2012 I think im right in saying? Ive just checked on my statement and it seems I got the lump sum wrong. My actual figures are £10'440 anual pensionsion and £31'322 lump sum. Thats working the night shift since 1998 so I would guess those figures would be slightly higher than average as the night shift allowance is pensionable I assumed.