Anyone here know about Pensions (work not state)

[LlareggubTripAdviser]

I have a Civil Service pension. 2 in fact like most CS . The 'classic scheme' that closed in April 22 and the Career Average which has taken over from it.

I had planned to partially retire at 60 taking the benefits of the classic pension.
As it is now closed. Am I correct in assuming it cannot be improved upon. ?
I have also been told that civil service /public sector pensions are increasing by 10.1% in April as they are index linked.
As my benefits will not increase in the classic scheme.. and the loss for taking it early is 5%. of the pension payment ...
Am I correct in thinking that I will actually be WORSE off waiting until I'm 60 ?.
I can't get a 10.1% increase unless my pension is in payment.

I know it quite complicated in the abstract . Maybe I will explain it better with numbers .

Let's say Pension is £15000 pa.
Taking it at 60.
Taking it at 59 pays £14250 pa. But 7 weeks later it will increase by CPI at 10.1 % to £15675

Have I missed something really obvious ? Or am I really going to be better of retiring early than waiting ?

Can you phone the pension scheme and ask them this? Mine were very helpful when I was in a similar situation.
In my case, I took a career break and my old pension went up as you described, then I started a new one when I returned. I can remember the pensions office saying it was a good thing to do because of the inflation linked increases.

Is the classic scheme completely closed (I.e. benefits calculated using your salary as at April 2022) or is it just that you’re no longer accruing service but benefits will still be calculated on your final pay when you eventually retire?

If it’s the former then that should still go up in line with inflation, but if it’s the latter then your benefits will increase in line with salary increases. Either way it won’t be completely frozen.

Thank you for the replies.

ChessieFL My salary won't go up. It will go down as Intend to take partial retirement at 60.

Yes it's completely closed. The retirement modeller in the pension portal shows exactly the same classic pension whether I retire at 60 or 67.. and if I increase my salary too 100k .. ! No effect at all on the old pension.

When you say it should still go up inline with inflation. Does that mean even if I don't take it ?
ie I stay working and next year my pension estimate would have increased ? I understood that the CPI increase only applied to pensions in payment ?

No, deferred/frozen
pensions also go up in line with inflation.

You need to go on the Civil Service Pension Website and look up McCloud. If you are affected potentially you will be given the option to have been treated as though you were in classic up until 31 March 2022. www.civilservicepensionscheme.org.uk/your-pension/2015-remedy/

WRT to April increase you must talk to Civil Service Pensions - I have a recollection that I only got a partial increase the first year.

I also think you should speak to an advisor in the civil service pension scheme. If you retired now I do not think you would get the full 10.1% as you have not been retired for a full year. This is an example from the civil service website.

“Example:-

You retire in mid-October with an annual pension of £7,500.

The following April, the cost-of-living increase is 3.5%.

As you retired exactly halfway through the relevant 12-month period, the pension is increased proportionately (that is, by one half of the total increase – 1.75%).

During the second year, the cost of living increase is 4.2%. Your annual pension becomes £7,631.25 after six months and £7,951.76 a year later.”

However, I think it is really important to get proper advice on this before you make a decision.