Deferring claiming your pension

[mint]

Has anyone any thoughts on deferring claiming your pension, whether private or state?

What would the current appalling state of the financial health of the UK have on your pension if you're due to take it now?

Apart from kicking the bucket and therefore not living to enjoy your pension, would the advantages of deferring (generally speaking, of course) outweigh the immediate advantage of taking it?

Thoughts, suggestions, advice, warnings, etc please.   

[Thibault]

I wouldn't defer taking a pension on the basis of  "a bird in the hand.....". 

Besides, in the UK, if one defers one's state pension for, say, five years, which was proposed by the government a few years back, there is a tax liability on the lump sum one receives.  As all the runes point to huge hikes in taxes in the UK in the future to pay for the current government approach to dealing with the recession, it would seem sensible to take one's pension when it becomes due.

This is, of course, a totally personal view.[:)]

 

 

[cooperlola2]

Having worked in the railway industry for quite a long time, I recall that the perceived wisdom in the 90s was that taking your pension early was a good idea, because the inflation indices used for upping pensioners' pensions were marginally more favourable than those used for pensions yet to be claimed. I got that from my then-boss the Director, Financial Planning, British Railways Board, who was himself about to retire, and, being an accountant, probably knew a thing or two! A succeeding boss, also a very high-flyer, took his pension at minimum age, 50, despite continuing to work. In my case, in the privatised railway, I was able to retire, take my pension, and then start with another company 3 days a week, while we prettied-up the house in Kent prior to selling it and swanning off to la Sarthe. If you are still amassing a pension, the calculations take a bit of doing, because final salary schemes in particular may lean towards leaving it as late as possible to get the max return.

I took the cynical view, based on my father's ill-health immediately after retiring at 65, that getting out early might mean we would have some good times before the Grim Reaper started making ominous noises. Frankly, when Cooperlola had her accident last year - I felt justified. My being lazy and wanting to give up work has nothing to do with it, of course!

As for the present financial hand-wringing, don't worry too much about your pension. Advice from my fund in its regular newsletter indicates that pension advisers have seen it all before, and there is no real risk - the equilibrium will return. Obviously that assumes your pension is safely-based in the first place!

[mint]

Food for thought indeed, Thibault and Coops 2.

The only thing that might persuade me not to take it yet is because I don't really need it at the moment and, besides, it's not as though I was a banker and can look forward to £700,000 a year!

I will ask them for a projection and proceed with due caution.  Many thanks to you both.

[AnOther]

A difficult one sweets with lots of factors to consider but as its not a looming decision for me just yet I'm open minded.

Unfortunately everything is a gamble [:'(]

About 1 year old but you still might find this an interesting read.

http://www.metro.co.uk/money/article.html?in_article_id=123899&in_page_id=36&in_a_source=

[mint]

Thanks, Erns.  As I understand it, it's stuffed if you do and stuffed if you don't![:(]

Gotta wait for the projections and then I'll decide and I'll promise myself I won't look back whatever the outcome thereafter.....

[AnOther]

Yep, a heads you lose tails you lose situation compound by the bl00dy rules changing at almost every budget [:'(]

Don't forget impaired life annuities, if applicable, and never blindly accept what your current provider offers, use the open market option and get quotes from other companies, I'm sure you know all this though [;-)]

[Thibault]

[quote user="sweet 17"]

Food for thought indeed, Thibault and Coops 2.

The only thing that might persuade me not to take it yet is because I don't really need it at the moment and, besides, it's not as though I was a banker and can look forward to £700,000 a year!

[/quote]

 

Even if you don't need your state pension now, it may be worth taking it and putting it into some sort of savings account each month - then you will have it when you DO need it!

[AnOther]

Regarding deferring the state pension; I think I'd be right in saying that that you need to be in receipt of a state pension to qualify for an E121 and all possession of that implies.

Interesting document HERE on the subject. Some illustrative tables from p15 but caution, assumed interest rate is 7.5% [blink]

See HERE also.

[mint]

Thanks for the suggestion but I'm through with saving..............yes, what's the point with interest rates practically negligible?  Not much incentive to save, is there?

Erns, thanks for the brilliant links.  Will take time to read through them; unfortunately, I am inundated with visitors and it's a job just getting them to leave the house and enjoy themselves elsewhere other than here with me![:-))]

[mint]

Erns, I've now read the links and just need a couple more "facts" to enable me to make a decision.

You're a brill financial advisor, haven't I said that before?

Must be all that sitting around afloat the North Sea that gives you all the time in the world to gen up on financial stuff?[:P]

No, no, I'm sure you really work very hard when you're off-shore; at least that's what you tell us.

Thanks a lot, Erns.  Regards to Mrs Bluecat if you would be so kind.........