lifting your pension early

[ulster postie]

Without getting into the nitty-gritty, ive left the buisness, after 21years, and i am thinking of taking the option of lifting my pension early,yes i am over 55, ive been onto the pension line and they say i have to put it in writing, but before i do that does anybody have any examples of what my pension payements would be. Any advice would be gratefully received.

[cyclemech1]

I'm over 55 too and asked for a quote on early payment of pension last year.
Basically, you lose 5% for every year taken before you are 60 (up to a maximum of 25% i believe).
I was set to lose over 20% so I decided not to bother, I can put up with this sh*t for another 4 years (or until they offer me proper EVR!!)

[coxie]

id advise against it if you are financially stable to manage for a bit longer, as the previous poster said you wont lose so much

[ulster postie]

Thanks for the reply guys, but my thinking is, if im no longer contributing to the pension,how would it benefit me to just let it lie untill im 60.

[naughton]

quoted ££20,000 lumpsum £60 a week pension,aged 52 so 15%bigger reduction but 3years more service(24 years )

[Lincox]

The reason to leave until 60 is because there will be no deduction for taking the pension early, so for argument sake if you are 56 now, your pension will be 20% less now than it will be if you draw it at 60. The reason being is that you will be drawing a pension 4 years longer. However you have to weigh up how much you will draw over those extra 4 years.

If you take the scenario that your pension at 60 is £5000 per year. If you take this at 56 the pension will only be £4000 per year. However you will have drawn £16000 over those 4 years. In order to have drawn the same amount of money you will therefore have to be drawing your pension from age 60 to age 76 to get the same amount of money that you have received by taking the smaller amount at age 56.

Hope this helps.

[RobertT]

Thanks for the reply guys, but my thinking is, if im no longer contributing to the pension,how would it benefit me to just let it lie untill im 60.

Aswell as the above comments,your preserved pension also goes up with inflation each year.

[norrie]

Taking the pension early ensures you will never catch up to what you would receive if leaving it to NPA of 60 !

Example -- At age 56 - assuming 20% reduction gives value of £4000 ; this means at that time the pension pot is effectively worth £5000 and if left frozen , will gain in value over the next four years through inflation and RPI figures , thus resulting in a figure above £5000 -- At say 3% , this may accumulate to @ £5628 .
The early payment of £4000 will be @ £4502 and never able to match or catch the sum taken at NPA of 60 . The 20% differential will always be reflected as each year passes , due to taking the pension early .
Lump sums are similarly reduced for early payment but on a lesser percentage reduction .
Careful consideration is advised to anyone proposing to take an early pension payment as the reduction ensures , at any time in the future , you will be getting , in this case 20% , less than you would have if left to pension age of 60 !