Superanuation

[redgill]

A year ago I had to leave my job with a County Council through illness,which comes under the disability Discrimination Act, although the CC said that as i could still do other work, I cannot retire through ill health. They have written to me this year saying what my pension will now be worth when i retire in 8yrs, at 65, also saying that if i cannot do the job that i was once employed at, because of ill health, I could get my penion now. and as I am over 55 I could still receive it now, this is tempting as I am now earning half of what I was earning with them. I know if I did it would be less than if I did leave it full term, but is it going to make a lot of difference in real terms. Your help/thoughts and advice would be most helpful. It seems odd to me that before i left they said i cant have it, but now saying i can, I was in it15yrs and they would have had to make it upto 20yrs, if i retired with ill health. Thanks in advance.

[buildersmate]

Through the pension trustees you should be able to ask for a prediction of what your pension would be worth per week from age 65, as well as what your pension would be worth now if you take it early (at 57).
Only you can work out what is best for you - you ask whether it makes much of a difference - yes, it sure does - but you ought to be able to see that from the values you get back. The pension value that you have accrued has to pay out for an extra 8 years worth. However if you need the money now, then I can understand you may feel it is worth drawing now. One only lives once.
You should actually be able to decide at ANY time between now and age 65 (or even later) that you want to start drawing your pension - ask the trustees about that - it isn't a question of only either now or at 65. So you could hold off until you feel you need the money.
Bear in mind that you will be able to draw your basic State Pension (currently worth about �90 per week) when you reach 65.
Also bear in mind that pensions are taxable, and that personal tax allowances increase sharply when one gets to age 65.

[redgill]

Thanks a lot, that has made things a bit clearer, I seem to get conflicting answers from the treasurers dept when i have spoken to them in the past.

[The Reporter]

You are presumably on a *final salary pension* scheme (given it is local authority), so the maximum pension you'd ever receive would be 40/80th's.. ie half your salary of the best of the last three years....That means you have to have worked for the last 40 years to get the full pension (ie half salary). If your employer is offering you anything better than this, then it's worth taking ! You can always get some other employment and it should not affect your pension. I think I would take 15 years for the 20 years equivalent contributions from your employer ! The contributions made by an employer in these schemes can be about 3 times as much as you put in, so definitely worth thinking about.

[redgill]

Thanks also for that useful info.