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ill health retirement

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User
Posted 19 Jul 2020 at 09:53

Hi looking for any members that have either retired on ill health or researched to offer advice.

My husband is 52 with a local government pension of 34 years service....he has stage 5 localised PCa on a curative plan but has been told he will probably be on HT for life. He is a heavy diesel mechanic and may struggle to keep the pace required for his job. Is he a candidate for ill health retirement šŸ¤” 

I'm hoping he can enjoy some quality of years in retirement whilst he has some good years still ahead of him.

User
Posted 19 Jul 2020 at 22:14
Moozel, it is worth asking whether your local authority / local Gov pension provider still offers the 85 year rule. Not many do these days but if it is available it makes the decision much easier! Otherwise, the employer has a duty under the Equality Act to make reasonable adjustments so that your OH can continue to work; this may mean an alternative role. If they are not able to do that, ill health retirement becomes more attractive to them. You may have to play the long game. Keep in mind though that, as said above, he needs interests or plans to remain active and have some purpose to his days if he isn't working; John goes to the gym, cycles, walks, birdwatches and is developing his photography skills - I also employ him part time to organise my work so he is busier than when he was working šŸ˜‚
"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

User
Posted 19 Jul 2020 at 13:45
I was medically retired at 46 from my company but on the grounds of mental illness / burnout. I was then diagnosed with T4 prostate cancer at 48.

Iā€™m not sure being on HT etc will allow him to get ill-health but just get advice asap. In my scheme the earliest you could retire was 55 but you lost 25% of your pension. Luckily my pension was as though Iā€™d retired at 60 so I was very privileged

User
Posted 19 Jul 2020 at 22:19
PS I think CJ's comment about losing the 25% is relevant to some more than others. We took financial advice before John stopped work - the financial adviser calculated that with the tax free lump sum and lower monthly pension, he would be in a deficit position at the age of 79. Since statistically he is unlikely to still be around at 79 it made financial sense to take out what we can now.
"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

User
Posted 20 Jul 2020 at 05:49
Yes sorry I was on a final salary pension whereby if you retire at 60 you get the maximum pension ( which is 66% of your final salary ) and a large tax-free lump sum. For each year you retire early you lost 5%. So if you went at 55 you would lose 25% of that money , at 57 15% etc.

But I was lucky to lose none as it was on health grounds. I guess a govt scheme is different and not many firms run final salary pensions anymore

User
Posted 20 Jul 2020 at 09:45

Thank you for your own experience and advice he has asked for a meeting with HR to be set up to find out if he would qualify. His company have issued redundancy notices throughout the company so it may be a benefit if they could consider redundancy  due to ill health as they cannot offer another position.

He would like to find a little part time or volunteering job with no stress or physical demands. I’m unsure if he would qualify for the 85 year rule but his pension is final salary.

I still plan to work full time so I understand that he needs some stability in his week to prevent him spiralling deeper into depression.  

 

 

 

Edited by member 20 Jul 2020 at 09:47  | Reason: Not specified

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User
Posted 19 Jul 2020 at 13:45
I was medically retired at 46 from my company but on the grounds of mental illness / burnout. I was then diagnosed with T4 prostate cancer at 48.

Iā€™m not sure being on HT etc will allow him to get ill-health but just get advice asap. In my scheme the earliest you could retire was 55 but you lost 25% of your pension. Luckily my pension was as though Iā€™d retired at 60 so I was very privileged

User
Posted 19 Jul 2020 at 22:14
Moozel, it is worth asking whether your local authority / local Gov pension provider still offers the 85 year rule. Not many do these days but if it is available it makes the decision much easier! Otherwise, the employer has a duty under the Equality Act to make reasonable adjustments so that your OH can continue to work; this may mean an alternative role. If they are not able to do that, ill health retirement becomes more attractive to them. You may have to play the long game. Keep in mind though that, as said above, he needs interests or plans to remain active and have some purpose to his days if he isn't working; John goes to the gym, cycles, walks, birdwatches and is developing his photography skills - I also employ him part time to organise my work so he is busier than when he was working šŸ˜‚
"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

User
Posted 19 Jul 2020 at 22:19
PS I think CJ's comment about losing the 25% is relevant to some more than others. We took financial advice before John stopped work - the financial adviser calculated that with the tax free lump sum and lower monthly pension, he would be in a deficit position at the age of 79. Since statistically he is unlikely to still be around at 79 it made financial sense to take out what we can now.
"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

User
Posted 20 Jul 2020 at 05:49
Yes sorry I was on a final salary pension whereby if you retire at 60 you get the maximum pension ( which is 66% of your final salary ) and a large tax-free lump sum. For each year you retire early you lost 5%. So if you went at 55 you would lose 25% of that money , at 57 15% etc.

But I was lucky to lose none as it was on health grounds. I guess a govt scheme is different and not many firms run final salary pensions anymore

User
Posted 20 Jul 2020 at 09:45

Thank you for your own experience and advice he has asked for a meeting with HR to be set up to find out if he would qualify. His company have issued redundancy notices throughout the company so it may be a benefit if they could consider redundancy  due to ill health as they cannot offer another position.

He would like to find a little part time or volunteering job with no stress or physical demands. I’m unsure if he would qualify for the 85 year rule but his pension is final salary.

I still plan to work full time so I understand that he needs some stability in his week to prevent him spiralling deeper into depression.  

 

 

 

Edited by member 20 Jul 2020 at 09:47  | Reason: Not specified

User
Posted 16 Sep 2021 at 08:06

Just an update after all the great advice.

My husband continued to struggle at work on a phased return so with the help of his HR he applied for and qualified for tier 1 ILL health retirement. We just need to now make a decision on how best to claim his pension. 

It's so stressful as his path is still unknown šŸ˜”  At least he can enjoy some quality time if this disease remains in our lives :(

User
Posted 16 Sep 2021 at 09:53

That financial decision is very difficult. I suspect the pension fund will be desperate to hand over a cash lump sum, rather than have to pay out each month for the rest of his life. Be very cautious of taking the big pot, a guaranteed inflation proof income backed by the government is worth a fortune. Especially as we may be about to enter a period of hyper inflation. 

Dave

User
Posted 16 Sep 2021 at 17:42
Get independent financial advice - our adviser ran lots of models for us of which option to take and what the impact would be. Basically, if John lives another 17 years we will get to the point where the other option will have been better. If J is still with me in 17 years, I don't think I will care a jot about losing out a little financially.

For someone with an expectation of living till they are very old, the lump sum may be a bad idea. For someone with a reasonably short life expectancy, taking the lump sum may be far more lucrative.

"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

 
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