55 before 2028

[SMS1969]

You don't actually lose anything if you take a pension early.

Let's suppose you take your NRA60 pension from your 55th birthday, yes it's reduced by 25% from what it would have been if you had waited until you are 60, but the pension is paid for life and by taking it early you will be receiving it for more of your life.

So lets suppose you die aged exactly 90, you would have had 35 years of pension at a reduced rate whereas if you left it 'til you were 60 you will have received a higher pension but you would have received it for 30 years instead of 35.

All good points, it’s common sense really.

[NWpostie]

Better to have more than less.

I plan to stick it out to 60 and claim when due, in the meantime I'm using the time to build a big AVC so I can have a comfortable retirement.

[freespeech]

You don't actually lose anything if you take a pension early.

Let's suppose you take your NRA60 pension from your 55th birthday, yes it's reduced by 25% from what it would have been if you had waited until you are 60, but the pension is paid for life and by taking it early you will be receiving it for more of your life.

So lets suppose you die aged exactly 90, you would have had 35 years of pension at a reduced rate whereas if you left it 'til you were 60 you will have received a higher pension but you would have received it for 30 years instead of 35.

All good points, it’s common sense really.

......but, as ever, you need to do your own analysis depending on your personal circumstances. Whilst you will get the pension for longer (if taken early) it will also mean that annual pension pay rises are less. Even though the % increase is the same you are starting from a lower income. Every year you effectively lose more. Furthermore, be aware that taking the pension whilst still working for RM will likely mean that it's all taxable. You would also lose some parts of your benefits like death in service if you have already taken your pension. When I did my own analysis I reckoned I would be worse off after about 18 years after drawing if I took it early.

[heapsy]

I could be wrong here, but if you are section C member, don't they swap the rate of increase from RPI to CPI?

[rambo1]

You lose 50%

Like I have explained earlier you can't lose money that you haven't contributed.

And this is why people don't have enough money when they retire. You will take a cut in whatever your pot is at 55. You will however have whatever this figure is, paid for 5 yrs(nra 60) and 10yrs (nra 65) extra.

[robking]

I could be wrong here, but if you are section C member, don't they swap the rate of increase from RPI to CPI?

Pension increases for Section C members are paid from April each year, the increase is based on the inflation rate, the previous September, as measured by the Retail Prices Index or RPI capped to a maximum of 5%.

Section A/B pension increases are based on the Consumer Prices Index or CPI but they are not capped, it doesn't matter if the pensions are paid by the RMPP or the RMSPS the rules are the same.

Inflation has usually been below 5% in both of the indexes but RPI has tended to be higher than CPI, meaning that Section C members had done better for many years, however during the past two Septembers, inflation has been above 5% which means that, because of the capping, Section A/B pensioners have done some catching up.

Inflation has now gone below 5% again, it was 4% last month and looks set to fall further.

[fly-catchers]

I could be wrong here, but if you are section C member, don't they swap the rate of increase from RPI to CPI?

If you leave RM before taking the pension and it is deferred it changes from RPI to CPI. Once you take the pension it reverts back to RPI, always capped at 5%.