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I know Robert T isn’t here much now but was interested in anyone’s opinions on this.
I have been offered a p/t job but the money isn’t great (min wage) 20hrs a week. I am considering lifting both my 60 & 65 pension to fund the shortfall in wages each month & have a better work life balance. I have no mortgage, kids all gone, no big bills and some savings in the bank. Do you have to take a cash lump sum or can you take all your pension as a monthly income?
Obviously I’ll get financial advice on the above but interested on opinions especially if anyone else has done this
I don't think you have to take a lump sum. You can opt for a higher monthly pension - (just as you can take it all as a lump sum if you want.)
But the 25% lump sum is tax free. Your higher monthly pension might not be depending on your circumstances.
The societies of consumption and squandering of material resources are incompatible with the idea of economic growth and a clean planet.
NRA 65 has Cash Balance. You cannot take that as pension. Also, you don't say which scheme you are in. Section B has automatic lump sum. Section C you can forego the lump sum.
I don't think you have to take a lump sum. You can opt for a higher monthly pension - (just as you can take it all as a lump sum if you want.)
But the 25% lump sum is tax free. Your higher monthly pension might not be depending on your circumstances.
Thanks, im presuming any income over £12k ish would be taxed and any pension would be included as income. It is a minefield when you start investigating RM pension
NRA 65 has Cash Balance. You cannot take that as pension. Also, you don't say which scheme you are in. Section B has automatic lump sum. Section C you can forego the lump sum.
I’ve 28 years in RM so section C. So NRA 65 is cash only I presume tax free, then NRA60 could be taken as a higher pension payment with no lump sum. Essentially I’m trying to work out a living wage without using my savings and not having to work as much. Semi retirement
A friend section c , left 10 years ago took a tax free lump sum and monthly income for the NRA60 and a lump sum for the NRA65 , 25% TAX free and 75% taxed. With no mortgage I'd say take what you can and enjoy the stress free life.
Last edited by Wullie10 on 29 Mar 2024, 21:50, edited 1 time in total.
If you are confident that you will have enough money when fully retired, then taking early for a better work life balance is a good option. You just need to do your sums carefully
I am taking both mine at age 55 so I can reduce my hours or fully retire.
A friend section c , left 10 years ago took a tax free lump sum and monthly income for the NRA60 and a lump sum for the NRA60 , 25% TAX free and 75% taxed. With no mortgage I'd say take what you can and enjoy the stress free life.
I’ll have to get in touch with a financial advisor after Easter, I think an easier life with a less toxic environment would be nice. You just know tomorrow will be a Sh1t show after today off
If you are confident that you will have enough money when fully retired, then taking early for a better work life balance is a good option. You just need to do your sums carefully
I am taking both mine at age 55 so I can reduce my hours or fully retire.
I don’t want to retire fully but the wee job is working in a Fruit & Veg shop with no weekend work because they use students for Saturdays I’ve worked out the NRA 60 is about £5k without lump sum. I can’t seem to understand how NRA65 works from what I’ve read.
Remember you would loose 25% on your 60 pension and 50% on your 65 pension which would include the cash balance. The cash balance can be used to fund the RM lump sum part of your 65 pension, with any excess then taken as a cash lump sum of which 25% is tax free and the remainder counting towards your income for that tax year. Alternatively you can take the whole cash balance as a lump sum, again first 25% in tax free, with the remainder taxable. I think another option for the cash balance is that you can transfer it to another pension provider then you could have other options such as a drawdown or an annuity. Also as a C member, you get a pension supplement with your pension when you leave RM until you reach state pension age, though again I believe it is reduced if you take your pension early.
If you contact RM pensions and Capita you can request an illustration for taking your pensions early. Have you checked your state pension forecast to see if you are on track for a full state pension, would your part-time job pay enough to give you qualifying years to get a full state pension? https://www.gov.uk/check-state-pension
Good luck, these pensions are a bit of a minefield and what suits one person may not be suitable for someone else.
Remember you would loose 25% on your 60 pension and 50% on your 65 pension which would include the cash balance. The cash balance can be used to fund the RM lump sum part of your 65 pension, with any excess then taken as a cash lump sum of which 25% is tax free and the remainder counting towards your income for that tax year. Alternatively you can take the whole cash balance as a lump sum, again first 25% in tax free, with the remainder taxable. I think another option for the cash balance is that you can transfer it to another pension provider then you could have other options such as a drawdown or an annuity. Also as a C member, you get a pension supplement with your pension when you leave RM until you reach state pension age, though again I believe it is reduced if you take your pension early.
If you contact RM pensions and Capita you can request an illustration for taking your pensions early. Have you checked your state pension forecast to see if you are on track for a full state pension, would your part-time job pay enough to give you qualifying years to get a full state pension? https://www.gov.uk/check-state-pension
Good luck, these pensions are a bit of a minefield and what suits one person may not be suitable for someone else.
Thank you for taking time to write your post
I do find it a minefield and especially confusing on the cash balance parts and what’s best action to be able to take the P/T job
and have a comfortable income until state retirement while enjoying a better work/life environment.
From what I read on state pension on the government gateway I should be ok with it.
I think being at RM and dealing with the toxic environment for so long, makes it harder to make the right decision. I’ve watched people my age starting at our unit this last couple of months leaving without a second thought.
The easiest thing to do is ring the pension people and say you want to take your nra 60 and nra 65 early and request a forecast. You are under no obligation to take either. On each you have a few options. The last option is to leave the pensions alone and not touch them. At least you have something to work on. Paying for financial advise without any forecast would be a waste of time and money.
I would take my nra 60 & the biggest tax free lump sum and if you can make that last a few years, then take your nra 65. That way you would lose less of your nra 65 at 5 % per year.. Don't know too much about pensions and maybe someone may correct me but that sounds a better option to me?
I’ve worked out the NRA 60 is about £5k without lump sum. I can’t seem to understand how NRA65 works from what I’ve read.