How much is this defined benefit worth ??

A

Aphrodite

Guest
Hi

I have a deferred / frozen benefit from a UK defined benefit scheme. The benefit is currently calculated as GBP 6000 per anum at retirement age of 65. I am currently 40.
The benefit will rise by the rate of inflation betwen now and retirement date each year (minimum of 3% and maximum of 6%)

Can anyone tell me what is the current value of such a benefit.

If I were to buy this benefit today, how much would it cost.Ball park figures are fine.

Much obliged !
 
C

Conan

Guest
Value

Assuming your pension was indexed at 3% p.a. to 65, its value then would be circa £12,600.
Assuming this is a single life pension (payable on your life only), the fund required to buy this at 65 (based on current Irish annuity rates) would be circa:
£194,000 - if pension was level in retirement
£270,000 - if pension is indexed at 3% in retirement.

The current value of this capital (assuming a 6% p.a. growth rate from now to age 65) would be circa;
£60,000, or
£80,000.

These figures are very approx, depending on the assumptions used.
Hope this helps.
 
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