applying for pension

[jhono]

well today I sent off to apply for my pension ,am 55 in march and have decided to apply now ,only had 6 years service but this equates to a pension of £1880 per annum ,obviously I am hoping this falls into the small pot category and I can take it all, some guidance seems to indicate this may be so .I already have an mod pension to pick up at 60 so thought I would have this 1 now ,fingers crossed ,I will update to let people know how it turns out ,ie facts and figures

[RobertT]

well today I sent off to apply for my pension ,am 55 in march and have decided to apply now ,only had 6 years service but this equates to a pension of £1880 per annum

Does that figure include the reduction for early payment? If not expect 25% less.

obviously I am hoping this falls into the small pot category and I can take it all, some guidance seems to indicate this may be so .I already have an mod pension to pick up at 60 so thought I would have this 1 now ,fingers crossed ,I will update to let people know how it turns out ,ie facts and figures

Up until April 2015 the value of all your pensions excluding the state pension, will need to add up to less than £30,000 for you to qualify for taking a pension under trivialty or the 'small pots rule’. The RM pension alone may well take you over that limit, your MOD pension almost certainly will.

There are new rules coming in from April 2015 which let people with defined contribution pensions take all their money out with the first 25% being tax free. The RM pension is defined benefit, so as far as I know, you will not be able to withdraw all your RM ‘pot’ as cash either before the new rules come in or after.

More info on the RM pension and how triviality and the new rules will affect it can be found here:
http://royalmailpensionplan.co.uk/65/22 ... on-changes" onclick="window.open(this.href);return false;

Some general info can also be found here:
https://www.moneyadviceservice.org.uk/e ... um-options" onclick="window.open(this.href);return false;

[jhono]

thanks Robert I had looked at that it is all a bit vague at the moment once I receive a reply from the pensions people I will update the information for all to see

[RobertT]

thanks Robert I had looked at that it is all a bit vague at the moment

I agree, things are very vague considering the new rules are due to be implemented in only about 10 weeks time. Plus a lot of pension companies have already said that they won’t be allowing their customers access to their defined contribution pots straight away if ever anyway, because their systems aren’t set up to allow the easy access as the government wants. So some headlines that I’ve read like : ‘use your pension like a bank account’, aren’t necessarily correct. Although it should be possible to transfer to a pension provider that does allow it.

once I receive a reply from the pensions people I will update the information for all to see

Thanks.

[jhono]

UPDATE,,,Received my acturally quotation back yesterday from the pension dept, I will be 55 on march 8th,i only worked full time as a postman for 6 years from 1990/1996.i have been awarded a pension of approx. £1400 per annum ,I have been given 3 options. option 1,take the pension,,,option 2 , take a reduced pension and a lump sum of approx. £7000 ,which is 25% ,option 3 ,take a smaller lump sum and a bigger pension .the commutation factor was outstanding at £23.12 for every pound of pension given up.hope this info helps

[savo]

Thanks for info bud, will be writing to them for quote on taking mine @ 55 in a few months..

[jhono]

no probs considering I left nearly 20 years ago ,I have decided to take the 7 grand lump sum and the monthly pension ,also bear in mind you get the pension supplement until you retire properly so like me that's 11 years away ,job done ,and there is still a widows pension

[RobertT]

Or option 4 – keep it deferred and take it at 60.

Thanks for sharing your info but personally I’m not a fan of taking a pension early due to:-

The actuarial reduction.
The income tax you will almost certainly have to pay on it(assuming you have another job).
Receiving less over all assuming living to average age for a 55 year old(early 80’s).
Potentially leaving yourself short in retirement when that bit extra might just make a big difference.


The commutation figure you mentioned is good although taking a lump sum from a final salary scheme is generally regarded as a mistake, because you lose the indexing on the pension you’ve given up and any investments you make with the lump sum are unlikely to match that over the course of time.

[savo]

no probs considering I left nearly 20 years ago ,I have decided to take the 7 grand lump sum and the monthly pension ,also bear in mind you get the pension supplement until you retire properly so like me that's 11 years away ,job done ,and there is still a widows pension

Is the pension supplement also reduced by 25% for taking early @ 55 ?

[jhono]

agreed Robert its a personnel choice I have a very good mod pension to take at 60 lump sum around 25 grand and 150 week pension so took this now ,the pension will just about pay the heating bill per annum ,and im sat waiting now having spent the lump sum on a new motorcycle ,triumph tiger 1050 happy days

[RobertT]

agreed Robert its a personnel choice I have a very good mod pension to take at 60 lump sum around 25 grand and 150 week pension so took this now ,the pension will just about pay the heating bill per annum ,and im sat waiting now having spent the lump sum on a new motorcycle ,triumph tiger 1050 happy days

[baldrick]

[quote="j im sat waiting now having spent the lump sum on a new motorcycle ,triumph tiger 1050 happy days [/quote]

Not a Lamborghini then?!

[jhono]

lambo on 6 year penson pot hardly likely lol how ever if it makes ya happy so be it the pension was never going o be life changing ,and my mod pension .state pension and the pension I currently pay into with another 11 years to go will more than pay for my retirement so like I have said for mr it was the right thing to do now

[jetblack]

Or option 4 – keep it deferred and take it at 60.

Thanks for sharing your info but personally I’m not a fan of taking a pension early .....

I tend to agree Robert - but :- a) if the guy works to live and doesn't live to work,

b) he doesn't buy a pristine and vintage one careful lady owner Ferrari Dino/cocaine habit with the lumpsum

c) he doesn't live to beyond 76 (average male lifespan ?)

and d) he has children, or perhaps a spouse, whom he may wish, in one way or another, to pass on the financial benefits of his working lifes endeavours (which would otherwise be lost at the max pension per annum option)



, then, as said, its all dependant on circumstances.

As a general rule though, I would definitely agree with your advice.

[roma12345]

I left Royal Mail in 2008 and when I reached 55 I took my 25% lump sum. I intend to withdraw the rest under the new pension rules that come into force this April. Is this taxable? It is only a small amount less than £20000.