Has the advice I got previously changed?

[David6937]

Asked a question a while back about my pension and the way ahead the answers I got basically backed my own thoughts, recently though I have been having doubts ... I am 57 going on 58 in June 41+ years service, I was considering last time taking my NRA 60 benefits early while continuing to work. I was advised that apart from the obvious (health, debt, etc.)situations when you might do this it was best left where it was until maturity at 60. Some aspects of my work life have changed since, I am currently a 740 cf driver and do regular nights, I have been fortunate that this was available and my seniority and situation allowed me to take the job, I would find it impossible to do any delivery function (my pins are wrecked ) and other options are few and far between so at the moment I'm fine, but situations change and we have had wind that our mail centre is looking for driving work (my office is a local hub) and they themselves are under pressure from another direction so the future and possible options is a little murky... then you add on the privatisation .....it's bound to get your marbles chuntering.

Anyway crux of my question I am again revisiting taking out my NRA 60 benefits that would be 2 years early for which I know I would lose about 5% per year from my benefits and lump sum, with the current unease over what's going on pension wise and privatisation wise I am just getting jittery that in 2 years a hell of a lot could change and not for the better. I would however continue to work and would hope to see beyond 60
Apart from the obvious question is this a practical and a financial step to take are there any drawbacks (apart from the obvious ones small pot, smaller pension due to the % loss ) does death in service also cease for instance??? Does my pension pot and lump sum the one that stopped in 2008 actually gain any growth while it's in limbo until my 60th, I was led to believe it did but some reading suggest that it did so but only initially not any longer .... I don't need the pension income nore the lump sum, unless the wife has gone ballistic on her last shopping spree, but I feel at this stage and with the current wave of unrest about all things RM pensions and privatisation the money might be better in my control rather than being left until or if I reach 60 .....

Your thoughts, opinion and guidance would be appreciated..................................................

[RobertT]

Apart from the obvious question is this a practical and a financial step to take are there any drawbacks (apart from the obvious ones small pot, smaller pension due to the % loss ) does death in service also cease for instance???

I've had a quick look on the pensions website, and I think if you take your NRA60 benefits early you will lose that part of the death in service benefit. But assuming you carry on working and paying into the pension you will still have a death in service entitlement from your NRA65 pot. http://royalmailpensionplan.co.uk/55/pensions-brochures" onclick="window.open(this.href);return false;
Also, your pension income will come under normal tax rules so you will also have to pay tax on the whole amount, but not National Insurance.

Does my pension pot and lump sum the one that stopped in 2008 actually gain any growth while it's in limbo until my 60th, I was led to believe it did but some reading suggest that it did so but only initially not any longer

As things stand, your pension up to 2008 is still linked to your final salary when you either take it or leave the company. There is talk of that changing but as yet there's been nothing official, and considering your age, you probably won't be affected by the rumoured changes too much anyway.

I feel at this stage and with the current wave of unrest about all things RM pensions and privatisation the money might be better in my control rather than being left until or if I reach 60

When changes happen to pension schemes, they are never retrospective, so the pension you've already built up is secure and most of that is backed by the government too!

The general rule for taking a pension early, is don't do it unless you need to, and as your planning to carry on working for the company, personally I think it would be a mistake. I think you'd be taking the early reduction and paying the extra tax for no reason.

[David6937]

Thanks RobertT you seem to be following the same lines of what was said to be previously ... which is why I left it as it was, a colleague did take the jump (on the same shift as myself) and he is happy with his lot, by my rough calculations he took a £5000 to £8000 hit on his lump sum (can't be more accurate as I am not aware of his figures as I am of my own he has similar service / job spec).. and obviously his pension is less ... his line of thought is he has about 2 years of pension untouched and the lump sum tucked away plus he earns much the same as I do each week .... he says it feels safer than having it in RM and the Government paws, which in view of recent developments is a fair view if not a practical financial view ....

[TrueBlueTerrier]

Can I just add a word of caution - RobertT gives valuable advice and his input is certainly highly valued on RMC. However, if behoves me to point out that it is ALWAYS better to get advice from an Independent Financial Advisor especially if you are going to make a life changing decision as to when or whether to take a pension at a certain time.

[David6937]

Thanks TrueBlueTerrier, I have indeed sat down with a good friend and as it happens an Independent Financial Advisor, his advice certainly on the financial side is clear and has basically not changed from my previous chat with him... what he can't take into account is the unease within RM of people like myself perhaps rightly who get jittery when the word pension is mentioned in the same sentence as privatisation, the Government and Royal Mail.

You might ask then why did I feel the need to post my question, maybe I just needed an additional reassurance from a more familiar source I was doing things the right way....