Pension - how to figure out how much I'll receive?

[NotJustACigar]

I have a civil service alpha pension. When I use their calculator it tells me if I retire at my normal retirement age I'll receive say £50k per year. But of I retire at 58 I'll receive £20k a year. So how do I know how much I would receive if I leave my current employer age 58 but dont take my pension until my normal retirement age (which I think is 67)?

You need to speak to your pension person at the department you work for. Not all civil service pensions are the same even in the same department.

Thanks unescorted. Is there any way to get a very rough estimate via a calculator or something as I'm having trouble finding someone to speak to about it?

I think you can use the online calculator. You need to calculate what you will have banked at age 58. This will be roughly what you would get at 67.

Remember you can claim your pension at any time between age 58 and 67. The nearer to 67 the smaller the reduction.

As per above, if it gives you a figure for the earlier age and you choose to leave at that point it will probably increase by inflation each year or thereabouts until you take it

Should be fairly easy to work out - your current salary x 2.32% x number of years until you're 58 plus what you've accrued to date.

There won't be any actuarial reduction if you take your pension at state pension age, but if you take it earlier then it's roughly either 4 or 5% (I can't recall exactly) reduction per year.

So say you work until 58 and you've accrued 30k
You take it at 67 = 30k
At 66 = 30 x 95% = 28.5k etc.

Of course this is all without factoring inflation.

Nor pay rises

Thanks all and remoteso that makes sense. In fact I guess I could start from the estimate at retirement age and subtract 2.32% per year between that and 58. Which works out as around £34k which makes sense. Obviously a very rough estimate but all I need for the moment.

Don’t forget to take into account that you won’t be paying into the pension between 58 and 68 so you can’t just take your current predicted amount at 68, as that assumes you’ll be working and contributing to your pension right through to 68.

You can also check how much state pension you’d be entitled to based on NI contributions to date on gov.uk I was surprised it was possible to see how many more years of NI to get maximum amount.

You can also sign up for the pensions portal which gives access to your current entitlement and there’s loads of extra info on there.

@FrownedUpon

Don’t forget to take into account that you won’t be paying into the pension between 58 and 68 so you can’t just take your current predicted amount at 68, as that assumes you’ll be working and contributing to your pension right through to 68.

This is extremely important and often catches people out on final salary pensions.

Has the £20k at 58 had a early retirement reduction factor applied to it or is that just the basic pension as at age 58?

@FrownedUpon

Don’t forget to take into account that you won’t be paying into the pension between 58 and 68 so you can’t just take your current predicted amount at 68, as that assumes you’ll be working and contributing to your pension right through to 68.

Yes that's right it's why I subtracted 2.32% for each year I wouldn't be working - to account for that. After that I went and found my annual benefit statement and added 2.32% for each year between now and when I turn 58 to what the statement says I'd be entitled to. It worked out as pretty much the same.

@Polkadotties

Has the £20k at 58 had a early retirement reduction factor applied to it or is that just the basic pension as at age 58?

£20k is actuarily reduced for taking the pension early. Leaving at 58 but not taking pension until retirement age means the pension doesn't get actuarily reduced but it does of course mean I wouldn't build up as big a pot.

If you leave at 58 and defer the pension until your normal retirement age the only way it will grow is by pension increase. This is currently linked to the consumer price index. For example this April, all deferred pensions were increased 0.5%.

@Polkadotties

If you leave at 58 and defer the pension until your normal retirement age the only way it will grow is by pension increase. This is currently linked to the consumer price index. For example this April, all deferred pensions were increased 0.5%.

That's true - if I'm not contributing anymore then it will only grow by pension increase.