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| Redundancy |
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| philf:
Most final salary pension schemes used to allow you to take your pension from the age of 50. (I believe that this may recently have changed to 55.) With our scheme there was a 4% reduction for every year you started to take the pension before you reached the age of 60. A lot of people thought this excessive and would delay taking their pension until they were 60 - the facts show that they were wrong. Going at 57 1/2 I lost roughly 10% of my monthly pension. But, like Stew mentioned, my pension is index linked and, in the 5 years since I retired, have had increases in excess of 15%. If I'd still been in work I might have had a total of 6 or 7% (for some of these years I know they got 0%!) If I'd delayed taking my pension until I was 60 I would be worse off - the monthly pension would have been about the same but I would have missed out on the pension I'd been paid for those 2 1/2 years. At work (and in work's time!) I devised a spreadsheet which calculated pensions and redundancy payouts. (I had many colleagues asking me to do the calcs for them when redundancies were mentioned.) The spreadsheet could also tell you when you would start to benefit by delaying taking your pension until you were 60. Ignoring inflation, I would have started to be in front when I got to 84 had I held on for another 2 1/2 years. The only mistake(?) I made was that for a year or so before I retired I went part time (3 days) so my redundancy payment was reduced accordingly. Our final salary scheme was closed and frozen a few years before I retired and so that wasn't affected. As well as paying into the final salary scheme I had paid AVCs (Additional Voluntary Contributions) for many years and then paid into a Money Purchase Scheme for a few years. With this pot I had to buy an annuity which was very demoralising as the rates then (and probably still now) were so poor. I held off buying the annuity hoping for the rates to improve - they didn't and I lost out on a few years income. The rules have changed(or are about to change) and you can take all your annuity pension pot to do with as you like (subject to tax). As my pot was small compared with my final salary pension, if I was buying my annuity now I would do take it all and give fairly significant lump sums to our children - benefitting them rather than the annuity company. I'm fortunate that I joined a Final Salary pension scheme as soon as I could and am now reaping the benefits. My wife and I live quite comfortably on our company pensions. When I had apprentices working with me I always used to bore them by trying to instil in them the importance of joining the pension scheme asap. Unfortunately many were persuaded by our Personnel Department (why are they now called Human Resources?) that they would be better off with a Money Purchase scheme rather than the Final Salary scheme as the FS pension was based on their basic pay whereas the MP Pension would be based on their actual pay which would include shift allowances and overtime. I wonder if they can now claim compensation for mis-selling! Phil. |
| boatmadman:
Hi, Sorry to hear about the threat of redundancy. I was in that position 18 months ago, with Centrica as well. They aren't generous I am afraid. I hope the offer you get is better than the one I got, it was 2 weeks pay per years service up to a maximum of 40 weeks, with no pension enhancement. I was 55 at the time. I had to take the alternative on offer, moved to a different business unit, a job I was doing similar to 25 yrs ago, and significantly less pay. Good luck. |
| garym:
Hi John, Redundancy is not fun much whenever it happens. I was made redundant from Ferranti (like Andrew) over thirty years ago. Turned out to be good for me in one sense as the job I got six weeks later has kept me busy ever since and I spent the redundancy money on a new car. You will probably feel angry that they are doing this to you after many years of service but it should pass. You have a great hobby to take your mind off things. I'd echo the thoughts of others and go for early retirement, if you can afford it. I feel sorry for the people whose pensions have been destroyed by the money men and it's a sad reflection on our society that we have allowed it to happen without any real fuss being kicked up on our part. Gary |
| John Rudd:
Well it's been a week since I finished work..... It's been hectic, fixing things in the house, a bit of electrics in the bedroom, car maintenance and dome DIY.....I need to go back to work for a rest ..... :lol: Off out in the caravan this week to Cirencester to a traction engine rally,should be good..... So far, yup I'm enjoying myself. |
| lordedmond:
John Sounds like you have got your head round it now , next question will be how did I find time to go to work :) The best bit for me is the winter time when I hear people scraping ice off their cars , now I just turn over in bed and smile Although I never did have to do it as NAT West used to send a taxi to take me to and from work , one day the taxi firms boss turned up in his car it had a flying lady on the front and RR badge on :jaw: Glad you have sorted now you can relax , my favourite comment to people when asked about jobs I say I am more secure that you are I don't have a job to loose Stuart |
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