What if you salary goes down before retirement?

R

rogeroleary

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I've been beavering away over the years and topping up with AVCs. Am now late 40's and whilst on a good salary targetting a pension of 2/3rds salary.

Just wondering what would happen if say at 55 I decided to go part time, or change job to a lower paid / less stressful job. Would the pension payable drop to 2/3rds of my part time earnings or the new salary? If this were the case it could undermine all my AVC contributions I have been making......:(

Any advice would be welcome
Roger
 
Thanks GZ, still not 100% clear on the impact but it looks like if you get to 55+ on your highest salary then you don't lose out?

Rog
 
Yes from age 55+ you should be safe.

As far as I can tell from the previous posts you could actually ramp down 10 years from final retirement (that could be at 60 rather than 65) and use the three years immediately preceding the ramp down with index linking for the calculation of your final salary.

There are more knowledgeable people in this forum which might want to correct that.
 
It would depend on the company that you work for...the revenue limits would be based on salary from age 55 but the company that you work for may have rules on the scheme that define your pension as being based on salary at the renewal date before your normal retirement date (65)...then you could be seriously hit by a big drop in income.
 
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