August 13th, 2008

More Free Money

Posted in The Job - General by 200

I’ve had sight of the new forumla for working out my pension commutation.

I don’t know how widespread the ability to commute your pension is, maybe you can do this in every job, I have no idea. Basically, what it means is that when you retire & your pension is due, you get a set amount of money in the form of the pension. You can convert part of the pension to a cash lump sum but get a reduced pension.

There’s a forumla where you can work out what your pension will be if you convert varying amounts of it to the lump sum & what the lump sum is likely to be. It’s based on your age at retirment.

The Federation had a little Exell spreadsheet in which you could enter your rank & age & it would give you a pension forcast.

Unfortunately, it became defunct when the Home Secretary announced the pension changes a couple of months ago. As far as I’m aware, a new calculator thingy hasn’t been released yet.

There’s some new charts floating around at work. You can look up a calculation figure based on your age, rank, inside leg measurement double it, add 27, half it and divide by the amount of complaints received in the last five years.

The calculator on my mobile almost caused my sim card to fry but after a few beeps, squeaks and some smoke it finally came out with a figure, which is over twenty grand more than it would have been prior to the change.

I made the mistake of informing Mrs Weeks of the new-found joy. Ever since I keep finding little post-it notes around the house; “needs replacing” is appearing on all the kitchen appliances, bedroom furniture & bathroom suite items.

I have a feeling that whatever I do when I retire, DIY will form an increasing part of it.

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  1. XTP says:

    Is it too complicated to link here? I’ve got 6 left but I’d be interested to know. ta.

    August 14th, 2008 at 18:39

  2. Blueknight says:

    It is usually bettr to take the full commutation, then at least you have it in your hand and if anything (God forbid) happens to you, it means the wife, girlfriend or au pair (or all three) can get their hands on it.
    The main thing is that you are in the pension scheme. Don’t worry too much about what to do until you have 18 months left.

    August 14th, 2008 at 20:04

  3. Plodnomore says:

    Unless the new pensions details have changed dramatically, it is always best to take the maximum commutation and the reduced pension. You may also need to work out how long you would have to live before taking the commutation became a financially bad thing – in my day it was about 16 years – but if I did pop my clogs, the widow’s pension would be based on the full pension rather than the commuted pension so you can take the lump sum, spend most of it, turn your toes up and your missus will have a pension based on the larger sum. You can’t lose. Well, YOU can, but your missus should be able to put the (higher rate) pension towards a good 18/30 holiday and, you never know…………!

    August 14th, 2008 at 20:12

  4. TaxPayingFool says:

    Take the lump sum! Cash in hand is never a bad thing.

    Also, are you allowed to transfer your whole fund somewhere else? If so, you could make a serious difference to your pension by transferring out. Worth asking the question, I’d have thought? Most pension funds don’t exactly advertise the fact that this option is available (one of the reasons why the whole industry gets such a bad name).

    August 17th, 2008 at 12:03

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