Enjoying Retirement
Discussion
nickfrog said:
Again, as you said, it depends on "what they do for a living, how much they earn and how much they actually have to pay back".
Her debt would have been paid back in 8 years, not 30.
Wow! Is her starting salary c.£97k?Her debt would have been paid back in 8 years, not 30.
I've assumed £50k student loan, and no annual RPI/Inflation on the loan, so £50k repaid over 8 years is £6.25k a year. This is at 9% of salary, so salary "taxed" is £69.4k, but only on salary after the loan threshold of £27.3k, so gross salary = £96.7k?
Somebody said:
Wow! Is her starting salary c.£97k?
I've assumed £50k student loan, and no annual RPI/Inflation on the loan, so £50k repaid over 8 years is £6.25k a year. This is at 9% of salary, so salary "taxed" is £69.4k, but only on salary after the loan threshold of £27.3k, so gross salary = £96.7k?
No debt £25k and she graduated 2 years after starting work at a large global FMCG (she basically stayed after her internship and finished her degree distance learning while being fast tracked). She quickly got to £80k.I've assumed £50k student loan, and no annual RPI/Inflation on the loan, so £50k repaid over 8 years is £6.25k a year. This is at 9% of salary, so salary "taxed" is £69.4k, but only on salary after the loan threshold of £27.3k, so gross salary = £96.7k?
Somebody said:
Wow! Is her starting salary c.£97k?
I've assumed £50k student loan, and no annual RPI/Inflation on the loan, so £50k repaid over 8 years is £6.25k a year. This is at 9% of salary, so salary "taxed" is £69.4k, but only on salary after the loan threshold of £27.3k, so gross salary = £96.7k?
If it is then great, but most people would be better off NOT paying off the loanI've assumed £50k student loan, and no annual RPI/Inflation on the loan, so £50k repaid over 8 years is £6.25k a year. This is at 9% of salary, so salary "taxed" is £69.4k, but only on salary after the loan threshold of £27.3k, so gross salary = £96.7k?
I've just left the police DB 87 scheme with 17 years in. I think I've paid about £5000 a year into this, and my pension projection shows a lump of £43k and under £7k a year paid from age 60 (in 20 years time). Does that seem like a decent deal? I think I might need some financial advice on it and I'm not well clued up on pensions. It's certainly a lot less lucrative than what I would have been promised after 30yrs before the govt whipped it away. I'm about to start a new pension elsewhere.
Chicken Chaser said:
I've just left the police DB 87 scheme with 17 years in. I think I've paid about £5000 a year into this, and my pension projection shows a lump of £43k and under £7k a year paid from age 60 (in 20 years time). Does that seem like a decent deal? I think I might need some financial advice on it and I'm not well clued up on pensions. It's certainly a lot less lucrative than what I would have been promised after 30yrs before the govt whipped it away. I'm about to start a new pension elsewhere.
Nobody can say, because what you paid in has no relation to what you gist as it is a DB schemeLeoSayer said:
radovich said:
Also been dipping into this one regularly and thoroughly enjoying it. So much food for thought. Just turned 59 with 43 years work under my belt and head’s all over the place about when to finish. Two teenage children, eldest shortly off to uni in London, so probably not any time soon unfortunately!
Got various DB and DC pensions with varying retirement ages. A retained DB one with NRA 62 is showing a less than 4% penalty if I take it now. Apart from being whipped for higher rate tax for as long as I’m still working, what’s not to like there? It’s not as if it has a fixed term, as long as I’m still chugging along, so is surely just free extra money. Or am I missing something patently obvious…
A few things spring to mind.Got various DB and DC pensions with varying retirement ages. A retained DB one with NRA 62 is showing a less than 4% penalty if I take it now. Apart from being whipped for higher rate tax for as long as I’m still working, what’s not to like there? It’s not as if it has a fixed term, as long as I’m still chugging along, so is surely just free extra money. Or am I missing something patently obvious…
I would have expected a reduction of 4% for every year you take a DB pension early - so 3 years early = 12%. A 4% reduction overall sounds suspiciously low.
You'd have to live with the reduction (whatever it is) for the rest of your life.
The treatment of inflation increases in DB pensions is usually different depending whether they are deferred or in payment. It's worth understanding the calculations given current and forecast inflation rates because this could make a difference to your decision.
You haven't said whether you actually need the money or what would you do with it. Without a plan you just be paying a load of extra tax just for the extra money to sit in your bank account, losing value to inflation.
The 3+% penalty on early withdrawal is from a (underfunded) Lloyds employee scheme, via various iterations. The CETV they’re offering me is 46x my pension so I’m guessing they either a) want rid of the liability or b) quickly want to understand exactly the extent of it. I get that I’d receive the discounted pension for the rest of my life but - at 3% discount but with an extra 36 months paid it would take a while to offset that discounting factor. Around 78 years we’ve calculated, roughly. Don’t think there’s any GMP liability involved.
I’m unlikely to end up a higher rate taxpayer in retirement, by £8k or so, so all safe there.
I’ve nothing particular in mind to spend the early pension on, other than imminent student-daughter-in-London outgoings.
Thanks for the spreadsheet offer Mike, but I am quite spreadsheet averse - which is probably why I’m still clocking in 50-60 hours a week, most recently for this glorious government of ours, all these years on!
There's no way in hell you're really being offered 46x as a CETV. The annual pension on the transfer information is almost certainly as at the date of leaving, which I'm willing to bet was a while ago. Therefore, it doesn't include the revaluation to date or indeed the remaining increases before NRA.
How exactly have you worked out the early retirement reduction? Have you seen a table of factors or worked something out yourself and if so how?
Does your CETV give you a breakdown of the different components of the total annual pension?
How exactly have you worked out the early retirement reduction? Have you seen a table of factors or worked something out yourself and if so how?
Does your CETV give you a breakdown of the different components of the total annual pension?
I merely report what I see. As an ex-employee I have access to a portal, administered by a very reputable third party IFA, which shows a current, revalued pension figure plus a CETV. Other ex-colleagues have described similar.
Admittedly it’s light on details, but equally I understand that both Lloyds and Barclays are extremely keen to offload their deferred pension liabilities.
Admittedly it’s light on details, but equally I understand that both Lloyds and Barclays are extremely keen to offload their deferred pension liabilities.
m30dus said:
Been following this thread with great interest - some great contributions and insight.
Having started my own gig back in 2007 I finally hung up the jacket early 2020 just in time to benefit from the more favourable ER lifetime limit that was changed in the March budget.
Work was a tough gig often seeing me away from home 4 nights a week only to be stuck in the office when I returned home for the weekend! Whilst in the large part it was still doing it for me, it was clearly depreciating and I just couldn’t get together with todays work ethics so better to stand aside than be the angry dinosaur stomping around the office..
Having put a lot of focus into winding down and with the hope of starting a family just before we both turned the big 40, my better half suffered a seizure in the weeks following the buyout. A few weeks on from that we are being sat down to be told it’s terminal cancer. Bugger!
We are two years in now, she’s doing great and best part through her primary care. Whilst family is clearly a no-go we are now focusing efforts on her treatment and on that finishing this summer, hopefully get some good travelling etc in.
Retirement for me has been great despite the obvious setback. Absolutely no idea how I functioned before at any level and just going into the office one day a week on a consultancy role wipes new out! No emails, no work mobile and no never ending list of demands is just bliss.
My days now start 3-4 hours later than they did just a couple of years ago, walking the dog, taking an hour to eat breakfast and drink copious amounts of coffee and just take the rest of the day as it goes, largely weather dependant!!
Am running 50/miles week and getting involved in a few property renovations, but only in the same street as where I live, or round the corner as to ensure there is no commute, bliss!
Life’s very, very short guys, and most of all unpredictable. You won’t regret it, any compromise is heavily outweighed by the seemingly never ending benefits. Just make sure your focus includes social interaction/hobbies/purpose/etc and not just finances. I, like most probably focussed too much on the latter but it’s the former you need most once you actually step back.
M30dus- be strong fella . Very key post this best of luck to you Having started my own gig back in 2007 I finally hung up the jacket early 2020 just in time to benefit from the more favourable ER lifetime limit that was changed in the March budget.
Work was a tough gig often seeing me away from home 4 nights a week only to be stuck in the office when I returned home for the weekend! Whilst in the large part it was still doing it for me, it was clearly depreciating and I just couldn’t get together with todays work ethics so better to stand aside than be the angry dinosaur stomping around the office..
Having put a lot of focus into winding down and with the hope of starting a family just before we both turned the big 40, my better half suffered a seizure in the weeks following the buyout. A few weeks on from that we are being sat down to be told it’s terminal cancer. Bugger!
We are two years in now, she’s doing great and best part through her primary care. Whilst family is clearly a no-go we are now focusing efforts on her treatment and on that finishing this summer, hopefully get some good travelling etc in.
Retirement for me has been great despite the obvious setback. Absolutely no idea how I functioned before at any level and just going into the office one day a week on a consultancy role wipes new out! No emails, no work mobile and no never ending list of demands is just bliss.
My days now start 3-4 hours later than they did just a couple of years ago, walking the dog, taking an hour to eat breakfast and drink copious amounts of coffee and just take the rest of the day as it goes, largely weather dependant!!
Am running 50/miles week and getting involved in a few property renovations, but only in the same street as where I live, or round the corner as to ensure there is no commute, bliss!
Life’s very, very short guys, and most of all unpredictable. You won’t regret it, any compromise is heavily outweighed by the seemingly never ending benefits. Just make sure your focus includes social interaction/hobbies/purpose/etc and not just finances. I, like most probably focussed too much on the latter but it’s the former you need most once you actually step back.
radovich said:
Fair enough, I’ll defer to your Lloyds knowledge here. There are always rules and there are always exceptions to those rules.
Probably academic anyway as I’ll most likely leave it where it is.
My guess is you're in the HBOS scheme. If that's right then after checking it probably is just a 3% reduction for payment from 59 because you're allowed to take it unreduced from 60 so it's only one year early.Probably academic anyway as I’ll most likely leave it where it is.
I still don't think you're being offered 46x the current annual pension, but like you say it's academic if you're not transferring.
Chicken Chaser said:
I've just left the police DB 87 scheme with 17 years in. I think I've paid about £5000 a year into this, and my pension projection shows a lump of £43k and under £7k a year paid from age 60 (in 20 years time). Does that seem like a decent deal? I think I might need some financial advice on it and I'm not well clued up on pensions. It's certainly a lot less lucrative than what I would have been promised after 30yrs before the govt whipped it away. I'm about to start a new pension elsewhere.
That's the problem with FS/DB schemes you really need to do the full time to get the best benefits. I think there's some sort of accelerator in your scheme whereby in your last 10yrs they contribute double the amount despite you paying the same percentage every month. I'd bet a private scheme wouldn't offer anywhere near that.On the subject of keeping a spreadsheet that takes you into your 70s/80s I can see the logic but there could be a tendency to get fixated on the figures all the time, not spend what you 'planned' and then end up with a pile of money you're too old or not there to use. It's not something I do and tend to manage my money on the pension payments paid into the bank every month.
Armitage.Shanks said:
That's the problem with FS/DB schemes you really need to do the full time to get the best benefits. I think there's some sort of accelerator in your scheme whereby in your last 10yrs they contribute double the amount despite you paying the same percentage every month. I'd bet a private scheme wouldn't offer anywhere near that.
On the subject of keeping a spreadsheet that takes you into your 70s/80s I can see the logic but there could be a tendency to get fixated on the figures all the time, not spend what you 'planned' and then end up with a pile of money you're too old or not there to use. It's not something I do and tend to manage my money on the pension payments paid into the bank every month.
I agree & so I can see the idea of front loading your pension although some might see this as a slightly dangerous game . On the subject of keeping a spreadsheet that takes you into your 70s/80s I can see the logic but there could be a tendency to get fixated on the figures all the time, not spend what you 'planned' and then end up with a pile of money you're too old or not there to use. It's not something I do and tend to manage my money on the pension payments paid into the bank every month.
PistonHead007 said:
radovich said:
Fair enough, I’ll defer to your Lloyds knowledge here. There are always rules and there are always exceptions to those rules.
Probably academic anyway as I’ll most likely leave it where it is.
My guess is you're in the HBOS scheme. If that's right then after checking it probably is just a 3% reduction for payment from 59 because you're allowed to take it unreduced from 60 so it's only one year early.Probably academic anyway as I’ll most likely leave it where it is.
I still don't think you're being offered 46x the current annual pension, but like you say it's academic if you're not transferring.
I’ve gone back and got updated figures as you’d planted doubts in my mind! Numbers have moved a little since my original quotation and you are right, I was basing my CETV multiple on my early retirement pension, with the 3% reduction.
So numbers are 4006 pen at date of leaving service (23 years ago); revalued to 7892 at NRA; discounted to 7586 if I take it now. Current CETV 328273, so still a whopping 41.5x full pension and 43x early pen.
This is now only a minor part of my pension provision so will be staying where it is, but… that takeaway multiple (I know the risks) is still pretty attractive to the more adventurous amongst us.
Apologies to everyone else having to read this dullness.
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