NRA 60 (coming up to 60)

[Patrick301]

I know no one can advise you and its up to the individuals circumstances bla bla blah etc etc ,,
but if you're coming up to your 60th birthday would anyone disagree with this
take your nra 60 benefits ,,, dont touch nra 65
choose the option of a lump sum

[Steve_claret]

Sounds about right but it really depends on how much debt you have as to the size of the lump sum you take. As you say everyone is different. Most people use the lump sum to pay off any debt which you pay interest on and clear the decks ready for retirement.

[RobertT]

I know no one can advise you and its up to the individuals circumstances bla bla blah etc etc ,,
but if you're coming up to your 60th birthday would anyone disagree with this
take your nra 60 benefits ,,, dont touch nra 65
choose the option of a lump sum

NRA stands for Normal Retirement Age, so it's perfectly logical to take your NRA60 at 60 and your NRA65 at 65. If you take them earlier they will be reduced, but they won't increase, other than by inflation, if you don't take them at NRA!

Most people do take the lump sum option(section C), but whether that's the best choice is for the individual to decide.

Lump sums tend to get spent quite quickly – on a few nice holidays, a new car, pay off debts, etc. But the bigger income will be index linked and provide more guaranteed income for life.
In practice there isn't really a yes or no answer, because everyone is different.
So do what's best for you!

[FAB]

I see Robert that the Government are strongly considering changing any remaining DB schemes that use RPI to CPIH between 2025 & 2030. Anything to save money. And considering the current situation that might be even sooner! Of course Section A/B went to CPI in 2010. So Section C can't be far behind.
Next they will probably reduce the 5% cap as well!

[NorthernBoy]

I see Robert that the Government are strongly considering changing any remaining DB schemes that use RPI to CPIH between 2025 & 2030. Anything to save money. And considering the current situation that might be even sooner! Of course Section A/B went to CPI in 2010. So Section C can't be far behind.
Next they will probably reduce the 5% cap as well!

Good point and entirely possible.

Personally I think we are in for a deflationary decade whereby there is virtually no real inflation. All governments now have the same problem of rising unemployment, lower tax receipts and massive debts. I think the only way out is for continued massive stimulus from the central banks/government and sovereign debt forgiveness across the globe. We are living in strange times.

[renrag40]

The way central banks are printing money at present to try to keep their countries going will further down the line lead to inflation...... how high is yet to be determined but virtually doubling the national debt even when borrowing at historically low interest rate is storing up inflationary pressure.

[stephen500]

The way central banks are printing money at present to try to keep their countries going will further down the line lead to inflation...... how high is yet to be determined but virtually doubling the national debt even when borrowing at historically low interest rate is storing up inflationary pressure.

They are borrowing a lot of money, but even this lot don't appear to be doubling the national debt for now. At present before Covid, the national debt was £1.7 trillion and will now go up by around another £330 billion, so far.

[RobertT]

I see Robert that the Government are strongly considering changing any remaining DB schemes that use RPI to CPIH between 2025 & 2030. Anything to save money. And considering the current situation that might be even sooner! Of course Section A/B went to CPI in 2010. So Section C can't be far behind.
Next they will probably reduce the 5% cap as well!

Yes, it will probably only be a matter of time before the RPI link goes to be replaced with another index. In recent years CPIH has typically been about 1% lower than RPI, so that will obviously have an impact on section C pensions if/when it happens.

[renrag40]

Hi Stephen, I think that original 330B was to help businesses. There has been a lot added to it since.... the cost of furloughing, help for the self employed, the increase in people claiming universal credit(over a million extra claims in the first few weeks). Then there is the contraction in the economy which could be as high as 15%. That is about £300B ..... total tax take of that ????? Say 40%?? £120B...... so we are already over £500B........ this is just this year......... without the extra cost to the NHS......... and it will flare up again next winter etc until a vaccine is found....... meanwhile the economy is getting clobbered and not getting back to normal, not generating tax revenues, increasing the national debt..... on reflection doubling the national debt might be a bit on the steep side but it’s still going to be way over the original 330B........depressing stuff.

[heapsy]

The way central banks are printing money at present to try to keep their countries going will further down the line lead to inflation...... how high is yet to be determined but virtually doubling the national debt even when borrowing at historically low interest rate is storing up inflationary pressure.

This could well lead to higher taxes, to pay for everything. There might also be a reduction in state benefits. A third of your tax goes on that alone.

[stephen500]

Hi Stephen, I think that original 330B was to help businesses. There has been a lot added to it since.... the cost of furloughing, help for the self employed, the increase in people claiming universal credit(over a million extra claims in the first few weeks). Then there is the contraction in the economy which could be as high as 15%. That is about £300B ..... total tax take of that ????? Say 40%?? £120B...... so we are already over £500B........ this is just this year......... without the extra cost to the NHS......... and it will flare up again next winter etc until a vaccine is found....... meanwhile the economy is getting clobbered and not getting back to normal, not generating tax revenues, increasing the national debt..... on reflection doubling the national debt might be a bit on the steep side but it’s still going to be way over the original 330B........depressing stuff.

In 2018 at £1.7 trillion it was 86.58% of Gdp and post WW2 it was 260% of Gdp. And after the war, we nationalised every thing, built tons of houses and created the NHS. So even if debt doubled, we would be no where near WW2 levels and yes it took a long time to pay that off!
But we can have debt and still manage to grow the economy.
Bad news for us, may be inflation, but that's good news for debt.
When we had high inflation in the 80s, my mortgage debt shrunk as a result, so will the national debt.
I just hope inflation is not too high, I want to enjoy my pension at the end of the year! ( I am ok, up to 5%)

[stephen500]

The way central banks are printing money at present to try to keep their countries going will further down the line lead to inflation...... how high is yet to be determined but virtually doubling the national debt even when borrowing at historically low interest rate is storing up inflationary pressure.

This could well lead to higher taxes, to pay for everything. There might also be a reduction in state benefits. A third of your tax goes on that alone.

A way around this is to raise corp tax and perhaps have a turnover tax for the likes of Amazon, forcing them to pay their fair share

[renrag40]

Amazon et al pay their fair share of taxes!! Wash your mouth out!! Dream on Stephen, dream on! Next thing you will be telling me that Rico doesn’t wear a syrup.