No problem, it's a bit like the proverb that "a bird in the hand is worth two in the bush".

I'll give a concrete example.

Suppose your 'full' pension at 60 would be £10,000 per year.

But you take it at 55, so instead of £10,000 you get £8110 per year.

This means that when you reach 56 you have had £8110. So you are that much better off than not having had it.

At 57 you've received two lots of £8110, so you are £16,220 better off than if you hadn't taken it at 55.

and so on until you reach your 60th birthday.

So on your 60th birthday you have had 5 lots of £8110, a total of £40,550. That is how much 'better off' you are at that point...

and that is the 'most' you will be better off because from now on, if instead of taking it at 55 you had waited until 60, you would be getting £10,000 rather than £8110. So each year after 60 you are losing £1890 from the 'better off' total. £40,550 divided by £1890 tells you how many years it will take to 'use up' the benefit and that is 21.45 years.

However, there is also the lump sum to consider and because this is 3 times the pension the difference in taking it at 60 is equivalent to 3 of those years, so in effect it takes 18.45 years to catch up...so 18.45 years after you reach 60 (i.e. you are 78/79) then you have used up all of the benefit of taking the pension early and from that point on as each year goes by you start to be 'worse off'.

Hope that helps but if not ask again and I'll try again

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