voluntary redundancy and Enhanced Pension

daveyeff · Post by **daveyeff** » 26 May 2016, 17:48

the ten year early reduction penalty is made up in the ten years you are getting your pension paid to you. ie the amount you get in that ten years covers the amount you lost. as for the 20 pound you pay into your pension that is a rise in your take home pay once you cease to pay it. by the time I am in my mid 70s I don't think I will be too bothered that i'm not getting as much money. I will have been getting my pension for almost a quarter of a century by then. and I'm certainly not bothered about my 80s or 90s. it worked for me and I am happy I did it.

daveyeff · Post by **daveyeff** » 26 May 2016, 17:55

the other lad that took his pension alongside me is 18.70 a week better off in his weekly pay than me as he stopped paying into it.. almost 75 quid a month better off, he puts his in his ISA

jetblack · Post by **jetblack** » 26 May 2016, 18:31

Yes - you have to go by the probabilities.

But what price do you put on your time ? Your time is your life. Its all we've got. Some people want their time more than others.

Me personally, if I'd had the opportunity, and had set things up in advance, I would have taken the retirement at 50 option in a heartbeat. Get a little part time gardening job to keep things ticking over- and spend my time as I wish. The mortgage is paid off, the kids would have flown the nest by then. I don't need a lot of money - give me an internet connection, give me my health, give me a drink at weekends and I'm OK thanks very much.

daveyeff · Post by **daveyeff** » 26 May 2016, 18:48

my thoughts exactly, I am as happy as a pig in clarts with those simple things.

Post by **RobertT** » 26 May 2016, 19:12

daveyeff wrote:the ten year early reduction penalty is made up in the ten years you are getting your pension paid to you. ie the amount you get in that ten years covers the amount you lost.

The reduction carries on after 60! Based on the probably crude figures in my previous post, Dave will have received the same overall as Bob (who took his pension at 60) at roughly 68, after that Dave will be increasingly worse off as time goes by.

as for the 20 pound you pay into your pension that is a rise in your take home pay once you cease to pay it.

It is an increase but of only £13.60 as previously mentioned. Are you not going to pay into the defined contribution pension from 2018 then, assuming the current scheme closes?

by the time I am in my mid 70s I don't think I will be too bothered that i'm not getting as much money. I will have been getting my pension for almost a quarter of a century by then. and I'm certainly not bothered about my 80s or 90s.

Things will obviously vary from to person but retirement tends to have 2 or 3 phases to it, and it definitely applies to my parents who are now in their 80’s:
1. The early years when you’re still active and want to do things. Whatever you do will normally end up costing money in one way or another.
2. The middle years when you’re starting to slow down and tend to spend more time at home which will affect the size of your bills.
3. The latter years when you tend to spend more a more time dozing in your armchair, cranking up the heating even more and paying for things to be done for you like the gardening, cleaning or for carers.

The higher the income you’ve got the more you’re likely to be able to cope with the finances involved with retirement, just as now. The idea that you won’t need money when you’re old is flawed I’m afraid.

it worked for me and I am happy I did it.

You might be happy you did it but at 57 I don’t think you can say it has worked yet.

Post by **RobertT** » 26 May 2016, 19:13

daveyeff wrote:the other lad that took his pension alongside me is 18.70 a week better off in his weekly pay than me as he stopped paying into it.. almost 75 quid a month better off, he puts his in his ISA

My NRA65 pension is accruing at the rate of about £300 per year and if the scheme closes in 2018 after 8 years I’ll have a NRA65 pension of around £2,400 per year for life. Your mate will have saved £7,200 over the same time plus a bit of interest.

I’d only need to draw my pension for 3 years to get the same as him and everything after that is ‘profit’, I know which one I’d rather have!

daveyeff · Post by **daveyeff** » 26 May 2016, 19:41

he paid his house off early. I paid quite a large amount off mine and only have a couple of yrs left, otherwise I would be paying it for a substantial time longer. as I said. it worked for me. as I said before he no longer pays his pension and is 18.70 a week (not 13.60) better off in his pay. by the time I reach 60 I will have had 30.000 in pension payments and a 17000 lump sum. now as you say you can live for another 30 years, but that is the chance you take. if I died at 61 I will personally have had naff all. my partners parents are pensioners and have no struggles now their house is off, which is I have to say my biggest desire. there is also a queue of people in ours ready to cash theirs in at 55 and no doubt it will be the case up and down the country. I am not telling anybody to do as I did, its their choice. but I have no regrets.

Post by **RobertT** » 27 May 2016, 05:29

I think we’re starting to go around in circles here.

In general it’s not a very good thing to do, if you’re happy then that’s fine.

There may well be a queue of people wanting to do the same but that doesn’t mean they’re all doing the right thing.

daveyeff · Post by **daveyeff** » 27 May 2016, 09:59

or the wrong thing

Post by **RobertT** » 27 May 2016, 16:27

jetblack · Post by **jetblack** » 27 May 2016, 19:44

Where to draw the line - that is the question.

If the option were a) work till you're 75 (not as far fetched as it might sound) and live like a king for the rest of your days or b) retire at 50 (with up to 34 years working behind you BTW) and live frugally ......... which are you going to take ?

I know which I'd take. I know it might not be the best decision financially - but, to me, that is a secondary consideration.

To be fair, Robert is spot on for the vast majority of people probably reading this forum. He's viewing it on a purely "actuarial" basis. And weighing up life expectancy, pension payout and retirement age he gives and shares good knowledge and understanding.

On the other hand, as I said upthread, it depends what your priorities are. Life is more than a balance sheet.

There are no right or wrong answers.

heapsy · Post by **heapsy** » 03 Jun 2016, 12:33

daveyeff wrote:no, we wouldn't have got a bigger lump sum had we waited til 60. as those benefits for that pension froze in 2010. as for the new pension closing/revised/etc in 2018. we'll will all have to wait and see what happens there. its being negotiated. and if it does close then that's 20quid a week rise in your pay straight away. as for it being a poor decision to take it early, well that's entirely a point of view. you could have waited until maturity to get more and die a week before it matures. my mate had 42 years on the railway, he got his pension, massive lumper, then found out 2 months later he had lung cancer and sadly passed away 3 months later. as for your projected figures. anything can happen anytime so in my view its best to get it when you can....but that is entirely my view.

Actually you are wrong. Even though the pension was closed in 2008 it STILL grows with cost of living. Mine has gone from £6145 with £1230 supplement, or £4545 with £30297 max lump sum.
It is now worth £6566 with £1237 supplement or £4946 with £32972 lump sum at the last statement. This does not include my NRA65 pension figutres. It also does not include my AVCs which only started in November but can be taken at 60 also.