Pension at 55

[Humbug]

Hiya all, if you request your Pension quote at 55, do they come back already minus the 5 per cent per year?
Many thanks, Humbug

[lordthornber]

It's 15 months since I took mine so it may have changed but mine didn't. It pointed out that if you take it, there will be the appropriate % reduction if taken at 55. It was perfectly simple to understand. I was section C.

[david3595]

Hiya all, if you request your Pension quote at 55, do they come back already minus the 5 per cent per year?
Many thanks, Humbug

Yes my quote for NRA60 @55 had 25% reduction included in the quote .

[Yamr1]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

[RobertT]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

If you take your pension early you lose 5% per year, so if you take all of it at 55, your NRA60 will be reduced by 25% and your NRA65 by 50%.

That applies to both the pension and the lump sum.

[Yamr1]

Cheers Robert t

[freespeech]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

If you take your pension early you lose 5% per year, so if you take all of it at 55, your NRA60 will be reduced by 25% and your NRA65 by 50%.

That applies to both the pension and the lump sum.

Can I establish what you mean by the last bit?

If I had a £100k pot at 60 I could take max lump sum tax free of 25% or £25k. If I retired at 55 my pot would reduce to £75k (£100k less 5% per year for going at 55). I could then take 25% of this (£75,000) pot which is £18,750. So the lump sum doesn't take a 25% hit.

That's my understanding...…..

[RobertT]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

If you take your pension early you lose 5% per year, so if you take all of it at 55, your NRA60 will be reduced by 25% and your NRA65 by 50%.

That applies to both the pension and the lump sum.

Can I establish what you mean by the last bit?

If I had a £100k pot at 60 I could take max lump sum tax free of 25% or £25k. If I retired at 55 my pot would reduce to £75k (£100k less 5% per year for going at 55). I could then take 25% of this (£75,000) pot which is £18,750. So the lump sum doesn't take a 25% hit.

That's my understanding...…..

25% of 25,000 is 6,250!

If you're in section C with an NRA60 pension worth £5k per year, using the 20x multiple you'll have a pot value of £100k, meaning a maximum lump sum of £25,000 and a pension of £3,750.

If you take it at 55 instead, both of those figures will see a 25% reduction, giving a lump sum of £18,750 and a pension of £2,812.50.

Multiply the reduced pension by 20 and add on the lump sum and you get £75,000.

[freespeech]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

If you take your pension early you lose 5% per year, so if you take all of it at 55, your NRA60 will be reduced by 25% and your NRA65 by 50%.

That applies to both the pension and the lump sum.

Can I establish what you mean by the last bit?

If I had a £100k pot at 60 I could take max lump sum tax free of 25% or £25k. If I retired at 55 my pot would reduce to £75k (£100k less 5% per year for going at 55). I could then take 25% of this (£75,000) pot which is £18,750. So the lump sum doesn't take a 25% hit.

That's my understanding...…..

25% of 25,000 is 6,250!

If you're in section C with an NRA60 pension worth £5k per year, using the 20x multiple you'll have a pot value of £100k, meaning a maximum lump sum of £25,000 and a pension of £3,750.

If you take it at 55 instead, both of those figures will see a 25% reduction, giving a lump sum of £18,750 and a pension of £2,812.50.

Multiply the reduced pension by 20 and add on the lump sum and you get £75,000.

You've misread by post. I've said 25% OR £25k not "of".......

£100k pot........£25k tax free

£75k pot (25% reduction of £100k going at 55).......£18750 tax free. Seems our figures agree.

[RobertT]

Now you've totally confused me!
You originally said the lump sum doesn't take a 25% hit, now you agree with me that it does?

[freespeech]

Now you've totally confused me!
You originally said the lump sum doesn't take a 25% hit, now you agree with me that it does?

I confused myself! I had the right figures overall (£25k or £18,750) but for some reason I didn't equate that to 25%!!!

Sorry for the confusion.

[RobertT]

Now you've totally confused me!
You originally said the lump sum doesn't take a 25% hit, now you agree with me that it does?

I confused myself! I had the right figures overall (£25k or £18,750) but for some reason I didn't equate that to 25%!!!

Sorry for the confusion.

[Humbug]

Many thanks all for all your input. I didn’t take it in the end. I am going to wait until I am 60. Fingers crossed EVR will be offered by then and that and my Pension, I’ll be outta here

[stephen500]

If you take pension at 55 , I know you lose 25%.
But if you take lump sum as well do you lose another 25% etc .

If you take your pension early you lose 5% per year, so if you take all of it at 55, your NRA60 will be reduced by 25% and your NRA65 by 50%.

That applies to both the pension and the lump sum.

In general that is true, but it appears to me that you don't lose the same amount of DBCBS. I certainly didn't. I think I lost for 5 years about 8%.

[stephen500]

Many thanks all for all your input. I didn’t take it in the end. I am going to wait until I am 60. Fingers crossed EVR will be offered by then and that and my Pension, I’ll be outta here

I took my NRA 60 at 59 and 10 months and my NRA 65 at the same time.
It all depends on your quote and circumstances as to whether you can afford to do this.
I have used part of my lump sum to bump up my income for 6 years, 10 months till my state pension kicks in.
I want to have a few years retirement and around 60 was right for me.
But I also a bit frugal and don't need to spend a lot.
It really helps if you own your home and don't have to pay rent.