Taking pension at 55. Confused

[ihatedogs]

I've just received my pension forecast for payment at 55. My lump sum plus monthly pension is approx 15% of my pension payable at 60, and I've been offered a lump sum with no monthly pension which is approx 75% of my pension at 60. As a layman, these figures appear wrong. With the accepted 5% per year reduction for taking it early then the standalone lump sum should have a monthly pension payable yes? And the figure with a monthly pension shuold be significantly higher? Any pension experts put me right on this? Cheers.

[RobertT]

Yes they sound wrong, but to get an answer to your questions you really need to provide more detail:

Which section are you in?
Are you wanting to take all of your pension or just NRA60?
What are your actual figures(aprox) for taking your pension at NRA?
What are you actual figures(aprox) for taking your pension early?
Why do want to take your pension early anyway?

[ihatedogs]

Hi mate, thanks for answering. Will provide all the info when I get home tonight, cheers.

[ihatedogs]

As promised I'm back with figures I'm in rmpp & rmsps section c.
NRA60
benefits at 60.
Lump sum £35955 pension £5394
benfits at 55
Lump sum £4894 pension £6366 OR lump sum £34030 no pension.

NRA65
benefits at 65
lump sum £30340 pension £3553
benefits at 55
lump sum £1082 pension £1394 OR
lump sum £7215 no pension.
Thanks again.

[RobertT]

I’m a bit baffled to be honest because section C members should basically have 2 choices:

1. Full pension & no lump sum
2. Reduced pension and up to a max 25% lump sum

All reduced by 5% for each year you take them early.

Unless something has changed that I don’t know of, there shouldn’t be an option to just take a lump sum. Plus your reduced figures bear no relation to the unreduced ones.

But I should point out that your ‘benefits at 65’ are irrelevant, because they assume you continue working for RM and paying into the RMPP until that age. So if you take your NRA65 at 55 that obviously won’t be the case. Plus the RMPP in its current form is due to close next year and nobody will accrue more than 8 years NRA65 service anyway.

Unless someone else on here can advise, I would suggest you contact the pensions dept. for clarification.