Thinking of taking my pension at 58

[Meloned1]

I’m considering taking all my pension at 58 1/2 . I’ve been employed with Royal Mail since 1990 started the pension asap. I’ve got the details through from both and I have an AVC that Royal Mail contributes a certain amount.
The question I’m seeking an answer to is I will loose a little bit over 5 percent ? ( not sure how much or for how long that is ) Asked a few people obviously and get conflicting opinions/answers ? Is it worth waiting till I’m 60 ? Many thanks in advance for help on this matter

[robking]

I’m considering taking all my pension at 58 1/2 . I’ve been employed with Royal Mail since 1990 started the pension asap. I’ve got the details through from both and I have an AVC that Royal Mail contributes a certain amount.
The question I’m seeking an answer to is I will loose a little bit over 5 percent ? ( not sure how much or for how long that is ) Asked a few people obviously and get conflicting opinions/answers ? Is it worth waiting till I’m 60 ? Many thanks in advance for help on this matter

If you take the NRA 60 pension 18 months early it will be reduced by around 7.5% but of course you'll be getting it for 18 months longer so that's fair enough, nobody really knows how long they will live, if you live to be 100 you can look back with hindsight and say that you would have been much better off waiting 'til 60.
The decision is yours but as a general rule I would say that taking a pension early can be a good idea if you have a good plan about what to do with the money.
For example paying off a mortgage early or paying off debts would be a good plan, but if you don't owe anything and you don't really need your pension money at this time it's probably best to leave it where it is.

[heapsy]

Something to consider is how much your pension will increase over time. You are section C as are many people in RM, including me. The increase is capped at 5%. Section B members it seems get much generous increases. Some are getting 9 and 10 % at the moment. If inflation were to peak at current levels some time during your retirement, you could struggle. I've been putting money into all sorts of different things to take as and when during my retirement. If you haven't diversified as I and others have, then think very carefully. Btw just for reference, I started in late 88 and have done nights on a rota. Even my pension isn't great. NRA60 will be around £160 per week with £50,000+ lump sum, although it's constantly updating due to increases etc. I am paying AVCs into Bonus plan and Flexi plan. Just be careful. I certainly wont be returning to work in my late 60s or 70s because I screwed up.

[RobertT]

I’m considering taking all my pension at 58 1/2 . I’ve been employed with Royal Mail since 1990 started the pension asap. I’ve got the details through from both and I have an AVC that Royal Mail contributes a certain amount.
The question I’m seeking an answer to is I will loose a little bit over 5 percent ? ( not sure how much or for how long that is ) Asked a few people obviously and get conflicting opinions/answers ? Is it worth waiting till I’m 60 ? Many thanks in advance for help on this matter

Are you planning on taking just your NRA60, or your NRA65 too? Because your NRA65 will be reduced by approximately 32.5% as you'd be taking that 6.5 years before NRA!

Early payment reductions are for life!

Generally, the advice is to leave your pension until NRA, because on average you're likely to get the best value for money over time – it's called Normal Retirement Age for a reason!
But in practice nobody is average and it's a decision only you can make, based on your own circumstances, etc.

Personally I would say, only take it early if it's for the right reasons, not just because you want it to fund a few nice holidays, as many seem to do!
You've paid into it for a long time, so why reduce it's value by taking it when you don't need to?
It's a pension intended to fund your retirement!

One thing I've noticed over the years on this forum, is that many people seem to think they're not going to live a long life.
Some obviously won't as that's what happens. But RMSPS statistics suggest the lifespan of its members is roughly equal to the national average. Anyone with even the most basic knowledge of how averages work, will know that for every one who dies before average age, there will be someone who lives longer.

[mags999]

I think receiving 200 pounds a week in state pension does make it more of an option to take it early these days but like you say its personal choice do you have more cash in your 60s or your 70s

[RobertT]

I think receiving 200 pounds a week in state pension does make it more of an option to take it early these days but like you say its personal choice do you have more cash in your 60s or your 70s

Or your 80's or 90's!

As someone with elderly parents in their late 80's/early 90's, I can say the idea that you won't need money when you're old is a fallacy. You just spend it on different things!

[mags999]

Very true its a toss of a coin

[heapsy]

I think receiving 200 pounds a week in state pension does make it more of an option to take it early these days but like you say its personal choice do you have more cash in your 60s or your 70s

Or your 80's or 90's!

As someone with elderly parents in their late 80's/early 90's, I can say the idea that you won't need money when you're old is a fallacy. You just spend it on different things!

Spot on Bob. Fewer nights out but more degrees on the thermostat and more on medication etc.

[Duran]

I’m considering taking all my pension at 58 1/2 . I’ve been employed with Royal Mail since 1990 started the pension asap. I’ve got the details through from both and I have an AVC that Royal Mail contributes a certain amount.
The question I’m seeking an answer to is I will loose a little bit over 5 percent ? ( not sure how much or for how long that is ) Asked a few people obviously and get conflicting opinions/answers ? Is it worth waiting till I’m 60 ? Many thanks in advance for help on this matter

Are you planning on taking just your NRA60, or your NRA65 too? Because your NRA65 will be reduced by approximately 32.5% as you'd be taking that 6.5 years before NRA!

Early payment reductions are for life!

Generally, the advice is to leave your pension until NRA, because on average you're likely to get the best value for money over time – it's called Normal Retirement Age for a reason!
But in practice nobody is average and it's a decision only you can make, based on your own circumstances, etc.

Personally I would say, only take it early if it's for the right reasons, not just because you want it to fund a few nice holidays, as many seem to do!
You've paid into it for a long time, so why reduce it's value by taking it when you don't need to?
It's a pension intended to fund your retirement!

One thing I've noticed over the years on this forum, is that many people seem to think they're not going to live a long life.
Some obviously won't as that's what happens. But RMSPS statistics suggest the lifespan of its members is roughly equal to the national average. Anyone with even the most basic knowledge of how averages work, will know that for every one who dies before average age, there will be someone who lives longer.

Robert in real terms. Won't he only be losing 2.66 years of NRA65. As that pension is only 8 years ? Members Cash Balance doesn't seem to be affected taking it early, as that is just a lump sum pot.

[RobertT]

I’m considering taking all my pension at 58 1/2 . I’ve been employed with Royal Mail since 1990 started the pension asap. I’ve got the details through from both and I have an AVC that Royal Mail contributes a certain amount.
The question I’m seeking an answer to is I will loose a little bit over 5 percent ? ( not sure how much or for how long that is ) Asked a few people obviously and get conflicting opinions/answers ? Is it worth waiting till I’m 60 ? Many thanks in advance for help on this matter

Are you planning on taking just your NRA60, or your NRA65 too? Because your NRA65 will be reduced by approximately 32.5% as you'd be taking that 6.5 years before NRA!

Early payment reductions are for life!

Generally, the advice is to leave your pension until NRA, because on average you're likely to get the best value for money over time – it's called Normal Retirement Age for a reason!
But in practice nobody is average and it's a decision only you can make, based on your own circumstances, etc.

Personally I would say, only take it early if it's for the right reasons, not just because you want it to fund a few nice holidays, as many seem to do!
You've paid into it for a long time, so why reduce it's value by taking it when you don't need to?
It's a pension intended to fund your retirement!

One thing I've noticed over the years on this forum, is that many people seem to think they're not going to live a long life.
Some obviously won't as that's what happens. But RMSPS statistics suggest the lifespan of its members is roughly equal to the national average. Anyone with even the most basic knowledge of how averages work, will know that for every one who dies before average age, there will be someone who lives longer.

Robert in real terms. Won't he only be losing 2.66 years of NRA65. As that pension is only 8 years ? Members Cash Balance doesn't seem to be affected taking it early, as that is just a lump sum pot.

NRA65 relates to the 8 years from 2010-2018 and 32.5% of 8 is 2.6.

However the amount you actually get also includes inflationary increases each year, which are compounded over time.
That applies before you take it aswell as afterwards.

So in practice, it's the actual amount in money terms that will be reduced, rather than the number of years he was a member.

*The RMPP website does state the DBCBS will be reduced if taken early, although posts on this forum suggest it isn't by much, if anything.

[NorthernBoy]

I was going to take all my pensions at 60, but am now thinking to take the lot at 57 ish. I will combine this with my sipp and should be fine until state pension age. For me this age seems like a sweet spot for taking all of my pensions.

If taking yours at 58.5 allows you to live the lifestyle you want then why not take them.

My view is that by taking my pensions early, my sipp will last longer as I will have extra income coming in.

[freespeech]

[/quote]
NRA65 relates to the 8 years from 2010-2018 and 32.5% of 8 is 2.6.

However the amount you actually get also includes inflationary increases each year, which are compounded over time.
That applies before you take it aswell as afterwards.

So in practice, it's the actual amount in money terms that will be reduced, rather than the number of years he was a member.

*The RMPP website does state the DBCBS will be reduced if taken early, although posts on this forum suggest it isn't by much, if anything.
[/quote]

Unfortuntately, once again, the info we get is confusing. Having looked at the letters from both RMPP and RMSPS outlining a pension just taken early there is no specific mention of the cash balance element so it's not easy to compare that to the annual statement amount to consider any reduction.