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Taking Pension at 55?

Discussion in 'Retirement' started by sairad, May 30, 2018.

  1. sairad

    sairad New commenter

    I'm not yet 55 but took voluntary redundancy from my teaching post when I was 50 after 24 years service, I have not gone back into teaching as I really don't feel it is for me anymore, but I am working in a school as a Support Assistant which I thoroughly enjoy. I want to ask if anyone has left teaching and then taken their pension at 55 did you find it enough to live off? I would probably continue with my job, for a while at least, and I have a property that I rent out so have other income. I'm just considering what I stand to lose by taking it early and would appreciate any thoughts from other ex-teachers on this site. I realise that once I've made the decision I can still do supply or another form of employment but I was hoping not to need to work.
  2. lindenlea

    lindenlea Star commenter

  3. Dunteachin

    Dunteachin Star commenter

    It's impossible to tell you whether it'll be enough to live on. Everyone's circumstances are different. You'll have to do the sums. :)
  4. eljefeb90

    eljefeb90 Senior commenter

    You really need to log into the TPS website or phone them. They are the only ones that can give you accurate information on your pension and lump sum and how much you will get by taking it at 55.None of us know your financial outgoings . The forums do provide some great nuggets of information, but the advice is general. The personal testimonies are fascinating though.
    paulstjohn2014 and Startedin82 like this.
  5. Startedin82

    Startedin82 Established commenter

    For me retirement at age 55 would have been out of the question - but everyone's circumstances are different. The actuarial reduction at 55 is significant but you would be getting the pension and lump sum whilst still relatively young. As others have said, only you know the answer really.
    border_walker and eljefeb90 like this.
  6. yodaami2

    yodaami2 Lead commenter

    Ball park estimates. Assuming you left on ups3 (3 Year’s in your last 10)full time for 25 years.
    If you wait til you are 60 then you would get around £ 12000 per annum. If you take it at 55 then you would lose about 20% of that. So down to £9600 per annum approx. Obviously you will also get the lump sum which you can spread out over the years ‘til you get the state pension( that’s lots of years though). Lump sum approx £28000. The TPS website will give more exact values but I don’t think this is far off. With your other incomes and especially if you can keep working until closer to state pension age, then I think it is worth considering. But as others have said, depends on the lifestyle you want to have.
  7. frangipani123

    frangipani123 Lead commenter

    If you took it at 55 you would be receiving it for five extra years compared to taking it at 60. Using the figures in the above post you would be receiving c£2,400 per year less but need to be in receipt of your pension until 75 before you would be worse off by taking it earlier: 5 x £9,600 = £48,000 divided by £2,400 = 20.
  8. yodaami2

    yodaami2 Lead commenter

    Yes very true. Also I am thinking it’s better to have the money while you are younger and probs more able to use/ enjoy it then in your late 70s when you will probably slow down go on fewer hols and eat fewer take outs!
    hammie, frangipani123 and Dunteachin like this.
  9. Dunteachin

    Dunteachin Star commenter

    I know so many people who are either very ill, dying or dead in their 60s, that my mantra is "grab it while you can!"
    Niges123, hammie, sairad and 6 others like this.
  10. yodaami2

    yodaami2 Lead commenter

    And take the money lol!
  11. FrankWolley

    FrankWolley Star commenter

    Took mine at 56 & 10 months, nearly 5 years ago. Best thing I ever did. Do the arithmetic and decide whether you can live on it.

    (FWIW I found I was spending far less on petrol for commuting to work, clothes for work and books to keep my subject knowledge up to date...But that's me. You need to work things out for yourself, I'm afraid).
  12. Jolly_Roger15

    Jolly_Roger15 Star commenter

    Agree about commuting. It is surprising (shocking) to discover how big a bit that takes out of your salary. Fill up the car once a week, £60 - 70.
  13. PeterQuint

    PeterQuint Lead commenter

    I’m always surprised about discussions which result in totting up how much money you’ll get altogether from your pension.

    Is that really what it’s about? Does anyone think they’ll be laying in their deathbed with a pad of paper, a pen and a calculator, working out how much they’ve taken from their pension, and figuring out if they’ve had more or less than if they’d retired a year earlier or later?

    And will you then die with a smile or a frown on your face depending on whether you’re a few grand up or down?

    I’ve calculated how much I need to live comfortably in retirement. When I get to the age where my pension will cover it, I’m off.

    Surely what matters is whether you have a decent amount to live on, for the longest time possible, not the results of some mid-last rights arithmetic.
    bevdex likes this.
  14. the hippo

    the hippo Lead commenter Community helper

    Yes, PeterQuint, I absolutely agree with you. A few friends and colleagues have said to me, "Why are you retiring early? You could work for another year. And how will you manage, if you do not get your pension until you are 60?" Well, I suppose that some of us just have to keep working for as long as we can, if we have big mortgages or children who need some financial help.

    Yes, your income is important, but so are your outgoings. Reducing your expenses in retirement and keeping your costs down is just as important (maybe more important) than having a big fat pension and a huge lump sum. In fact, I am going to start a thread about reducing one's ependiture after retirement.
    bevdex and PeterQuint like this.
  15. border_walker

    border_walker Lead commenter

    But in reality it will be less - you will lose the inflation on the money that you don't get, adds up to about £12000 based on 2% / annum.
  16. Yoda-

    Yoda- Lead commenter

    Do the sums. If you can afford it, realise your pension. I did...

    Jamvic, bevdex and frangipani123 like this.
  17. frangipani123

    frangipani123 Lead commenter

    The point I'm making is that it's sometimes forgotten that you will get your pension for x years more. In my view, at a certain point, time is way more valuable than money. Each to their own!
    Jamvic and sairad like this.
  18. Ezzie

    Ezzie Occasional commenter

    I'm not actually paying into my English pension (moved to Scotland) so I assume my 'pot' isn't going to get any bigger. Sorry if this is a stupid question but would it make any difference if I hang on for 6 months and retire at 56 rather than make the leap now at 55?
  19. 50sman

    50sman Lead commenter

    No it will make no significant difference.
    If you are not paying into the pot then you are a deferred member of the scheme. Your final salary will have been decided.

    Obviously the longer you leave it in you will get inflationary rises - also every month you leave it in means you gain one month more on ARB.

    Talk to TP
    Ezzie likes this.
  20. Dorsetdreams

    Dorsetdreams Occasional commenter

    That isn't a reason not to take it, because the pension gets inflationary rises when being paid anyway.

    Yes, each month you hold off, the ARB reduction is 3 or 4 1/1000 ths less:


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