Pension Supplement Calculation

[BeamishStout]

Am a little unsure as to how to calculate the pension supplement I am likely to get if I retire at 60 taking all benefits at that time. The pension line could not give me this 'rough number' over the phone

The 'nutshell' statement lists 3 pension supplement numbers in my particular case:

NRA60 Estimated Benefits p2 Pension Supplement = £585
NRA 65 Estimated Benefits p2 Pension Supplement = £745

And on p4 it lists the total pension supplement (up to 31st March 2016) = £938.

Am I correct to assume there is no reduction in the NRA60 pension supplement if SRA = 60 in my case?

OK I realise that these numbers will change slightly upwards between now and when I retire (60 in April 2018 - just after the current scheme ends/is changed) but for the sake of simplicity just assume these numbers remain the same.

I saw Robert's 5% off for each year for pension supplement benefits taken early in another thread.

So am I correct in the following calculation using my numbers:

Total Pension Supplement Due if taken @ 60 (NRA60 + NRA65) = £585 + 75% of (938-585) = 585 + (353 x 0.75) = 585 + 264.75 = £849.75 assuming no additional CSDB pension supplement blocks added between the 2016 March 31st illustration and April 2018 (when I intend to retire at 60)

And am I correct to assume this is payable until state pension kicks in (when I am 66)?

[RobertT]

I would agree with your total of £849.75 based on your illustration figures as at 31st March 2016.

I would also estimate that your NRA65 supplement will go up by around £58 for each of the 2 years from 2016-2018, giving you another £87 after the 25% reduction for taking it 5 years early. Therefore your total supplement figure should be about £936.

Your pension including the supplement will only be reduced if you take it before the relevant NRA.

The supplement is paid as long as you’ve left RM and taken your pension, and stops at your state pension age, whatever age that is.

[BeamishStout]

I would agree with your total of £849.75 based on your illustration figures as at 31st March 2016.

I would also estimate that your NRA65 supplement will go up by around £58 for each of the 2 years from 2016-2018, giving you another £87 after the 25% reduction for taking it 5 years early. Therefore your total supplement figure should be about £936.

Your pension including the supplement will only be reduced if you take it before the relevant NRA.

The supplement is paid as long as you’ve left RM and taken your pension, and stops at your state pension age, whatever age that is.

Much obliged Robert

Glad my powers of mathematics have not deserted me.

Just wonder why I was given such a vague and non-committal reply when I phoned Chesterfield

[BeamishStout]

Cor blimey nearly a year since this original post. Not long to go now.

Just got my last bumpf from RM re pension when I take everything from my 60th in April 2018.

The estimated pension (NRA60 + NRA65 with reductions) tallies with everything I have received to date although it must change due to (a) an additional pension block earned from 1st April 2017 - 31st March 2018 (b) the revaluation 31st March in line with RPI as per September 2017 which was 3.9% I believe. Neither of these things are factored in or even any pay rise (if awarded before retirement).

However the pension supplement amount appears to be quite different as the letter I received today suggests it would be somewhat less than the figures in this thread - in fact £733.71 p.a.- to be precise. As per previous para this 'quoted' figure on my letter probably doesn't include the same additions to the pension supplement.

So am now wondering why my original arithmetic is so wide of the mark.

Edit: After pension revision pension supplement works out to be £736.22 p.a. still somewhat shy of my original calculation figure £849.75 (or RobertT's £936).