Can someone confirm this means what I think it means - re deferred occupational pension

[PuzzledObserver]

TLDR. “Scheme benefits are not age-reduced after age 63”.

Am I right in thinking I can take my pension at 63 and receive exactly the same pension as I would if I waited until 65? Same amount, but 2 years earlier? Is there a single reason I wouldn’t do that, given I’ve long since stopped work?

Back story:

My first job after uni was for an old-fashioned firm with an old-fashioned pension scheme, in which the retirement age was 65 for men and 63 for women. Joining it was not optional.

Some years later, when pension legislation started changing (late 80’s?) we were given the chance to opt out. Naturally I didn’t take it. We were then invited to vote to equalise pension age at 65….. and I’ve got a recollection that it would not have made any difference to me, because the maximum number of years you could pay in was 40, and I joined at age 22. I’ve also got a recollection of being told I could still take my pension at 63 and not lose out. I left that employer in the late 90’s and have a preserved pension with them.

Well this has been playing on my mind, and I’ve been wondering at what point I would receive notification from the scheme, given I turn 63 in a few months. So I’ve been and looked at the FAQ for deferred members on the website, and discovered the sentence at the top of my post…. Along with one which says, we won’t contact you, you have to contact us.

So I’ve just emailed an inquiry, and am feeling very excited….. so I guess I’m purely posting for reassurance that I’m not totally bonkers in thinking it means what I think it means.

Yes, I think you're right.

My first job has retirement age 60 for women and because I left before it changed, I can still have my full pension at 60.

Oh, I’ve just seen another sentence in response to “when can I take my preserved pension” which goes

“Normally at any time after age 55, though it will be reduced for early payment if you draw it before age 65.”

So, reduced for early payment, but not age-reduced after age 63….. what’s the difference?

Ah well - presumably they’ll be back at work tomorrow and will answer my emails, and then I’ll know.

I think it could be that you can take the pension earlier without reduction.
I was in a similar position with my pension, I was able to take my pension at 51 without any reduction (normal retirement age was 60). I was one of the last individuals in the company with those terms and I couldn’t quite believe it. When I was in the position of being made redundant I took the pension.
Fingers crossed for you.

My first job after university was with a company where women retired at 60. I have a decent pension from there as I worked there for a long time. I was able to take my pension with no reduction at 60 because they were the terms when I started. A few years after I started, the retirement date for women was abolished so the pension was only payable without reduction at 65. I think my experience is similar to yours op so I would guess you can get a pension at 63 with none or very little reduction.

Ooh. Is that right?

I have an NHS pension, because I worked for them from being 18 to 22 (Waaay back in the 1980s).

I then left.

I'm now 60 and haven't claimed the pension because I thought I had to wait until I was 67 to get it.

Do you think I can start drawing it now (I am retired from work through ill health) without losing any of it? I was really leaving it because it's probably about £50 a month and I thought I might as well leave it til I was 67

Whatever device you used to post this can also be used to find the terms of the pension scheme which was in place at the time.

You might find it's enhanced if you leave it longer, but definitely worth checking.

I'm not sure what the pension was that long ago but the 1995 section of the NHS pension you can definitely claim at 60.

I posted the same query to AI, and it said that I was in the sweet spot of being able to take it “early” without being penalised, but then went on to say it depends how the scheme rules apply increases to deferred pensions versus those in payment. Gave me some questions to ask the administrators once I get the response to my request, and how to work out whether the 24 additional monthly payments are actually better in the long run - which I was assuming they would be.

But I think what I’ll do is lob all the info over to our IFA and see what she says. I had previously told her that normal pension age in the scheme was 65.

I'm almost sure it does. One of my past employers had an old style pension that paid out at 60. When I reached 60, it was a very nice surprise.

You'll be in the older scheme with a normal pension age of 60 and no enhancement for leaving it later. So take it now.

That's exciting OP. I get £60pm for the 4 years late DH was a very junior rank in the Army pension scheme when he left school, which is half what he would have got, so you might be pleasantly surprised.

Sorry for hijacking your thread, OP - but very many thanks to all who have responded.

I will check. I was simply assuming that it would enhance a bit if I left it another 7 years, but if I can draw on it now without losing anything I might as well!

No worries - I speak s a regular thread-hijacker :-)

A quick update..... still waiting for a response from my pension scheme, but went back to look at last time I asked (2 years ago) to see how long it took them then. Answer is 1 week after my request to generate the letter, so I can afford to wait a bit longer before I chase.

But in doing that I discover that I had effectively asked the same question back then, but more or less ignored the answers, which were these

At age 63, pension will be £12,212.52
At age 65, pension will be £12,894.60

The difference is £682.08.... but of course I would have £12,212.52 x 2 = £24,425.04 over the 2 years between age 63 and 65. And at £682 per year, it will be another 35 years before the lower starting value erodes the benefit of taking it 2 years earlier. I'm not convinced I will live to 100...

I need to see the up to date figures and run it past my IFA, of course.... but can someone do a sense check on this, please

Actually, I think I’ve pretty much done it. The difference between the 2 amounts is 2.75% compounded for 2 years - basically inflation. I’d be bonkers not to take it, wouldn’t I?

Yep, bonkers not to take it. None of us knows how long we will live.

I had similar with one of my pensions. I somehow had the idea that it would be better to wait until 65. Then I looked at the actual numbers and understood there was no point in waiting.

Almost all DB pensions have some inflation linking so you will get higher amounts every year. Unless inflation goes back to almost nothing.

Well I've checked on my NHS pension and the man on the phone said to apply for it now, so I'm jolly grateful for this thread.

He said it won't increase if I leave it 7 years and I might as well be drawing on it as I'm 60. I'm just filling out the forms to do so!

Woo hoo!

Yes, mine does. I’ll have to go back and check the details, but it will go up each year.

Yes you can take it at 60. But, as a deferred member you don't lose anything by not taking it (unlike if you were still working in the nhs). Give them a ring (they're rubbish at replying to emails).