Reducing working week from 39 hours

[thewayforward]

Does anyone know if reducing your weekly hours from full time affects the amount of pension you pay and may ultimately receive when retiring? I am currently 55 and also does it affect any subsequent redundancy offer in the future? I am entitled to 104 weeks pay at the moment,I presume a buy down in hours is sometimes an option?

[RobertT]

Does anyone know if reducing your weekly hours from full time affects the amount of pension you pay and may ultimately receive when retiring?

Assuming you’re in the RMPP(final/career average scheme) you will be paying 6% of your pensionable earnings. If you reduce your hours, you will be paying 6% of a smaller amount so your pension will accrue more slowly from that date. Although what you have already built up should not go down.

I am currently 55 and also does it affect any subsequent redundancy offer in the future? I am entitled to 104 weeks pay at the moment

Under MTSF(I think it still applies), if you are 55 or above and still in the pension scheme you will actually get 26 weeks pay plus a slightly enhanced pension. You would need to withdraw from the pension to get 104 weeks. Going part time will obviously reduce the amount you might get as you’re earning less but the number of weeks would be the same

I presume a buy down in hours is sometimes an option?

Potentially yes.

[thewayforward]

Thankyou for that reply very helpful.I understand the rules relating to the MTSF have changed quite recently,hopefully not negatively,must try and get some clarification on that.