CSP - no freedom at all

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Mpb
Mpb Posts: 6 Forumite
in Pensions, annuities & retirement planning
Newby here, I’ve been lurking and having a good read. Nice to “meet” folks.
I’ve been working hard to start my own business but having to jump through myriad bureaucratic hoops and also contend with “its not what you know...”.. Anyway, I’ve been looking into rationalising my pension arrangements and with 25 yrs of CSP contributions I wanted to move them to another product. However pension freedom doesn’t apply to former civil service as we can’t move anything from the CSP Ponzi scheme. I’m infuriated that I can do nothing at all. I have no control right now and have to wait til I’m 55 to possibly have a chance to make any changes... As a rational adult I’m incensed st the patronising “nanny knows best” attitude. It’s my pension, I should be able to make decisions on what and how things are done with my money...
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  • NotSkint
    NotSkint Posts: 74 Forumite
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    This has to be a wind up!
    The civil service pension scheme is pretty darn good for what you didn't pay into it!
    Unbelievable!
  • OldBeanz
    OldBeanz Posts: 1,404 Forumite
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    The Government does not have the cash to pay all their pension liabilities upfront. They have been quite open about that from the beginning. Perhaps rationality would have been... If you are going to be in a Ponzi scheme then a Government backed one is the best.
  • JoeCrystal
    JoeCrystal Posts: 3,028 Forumite
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    Do you mean Civil Service Pensions? Well, how can you move money when there is no money at all? You should be appreciative and grateful that you were able to pay into a gold plated pension scheme.
    Again, can you explain how pension freedom can apply to a scheme that have no money at all apart from the commitment by the government to pay for you?

    Beside, if you was on classic scheme, you didn't pay a single penny for it apart from a percentage of pay towards a widow’s/widower’s/surviving civil partner’s pension?

    Anyway, virtually nothing can equal the pension you will get from CSP. Maybe you can say how much pension and lump sum you are due to get and you will see just how costly it is to get an equivalent benefit outside still extremely generous defined benefit schemes.
  • Mpb
    Mpb Posts: 6 Forumite
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    It might have been a good one at one point but I’m not confident that will be the case in future. I’d like to have the same “freedom” of other pension participants to move my pot to another scheme, to be able to choose. As it is there’s no choice at all.
  • JoeCrystal
    JoeCrystal Posts: 3,028 Forumite
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    Mpb wrote: »
    It might have been a good one at one point but I’m not confident that will be the case in future. I’d like to have the same “freedom” of other pension participants to move my pot to another scheme, to be able to choose. As it is there’s no choice at all.

    There is no pot of money for you to move it out. If you already left then you got iron clad promise to pay you that amount for the rest of your life. It is still an excellent foundation for any retirement provision.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    Mpb wrote: »
    It might have been a good one at one point but I’m not confident that will be the case in future. I’d like to have the same “freedom” of other pension participants to move my pot to another scheme, to be able to choose. As it is there’s no choice at all.

    You need to do a little more research and return when you know a little more about pensions.

    Assuming you have access to the 'pot' what are your plans for it?
  • Mpb
    Mpb Posts: 6 Forumite
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    There are a couple of options tbh but I’m struck by the fundamental difference in attitude. When I joined nearly 30 yrs ago I was told I’d be paying pension contributions to MY pension pot - ie paying into my own scheme. Not paying to an IOU scheme. And for the rules for pensions to be changed to grant “freedom” for everyone else but not CSP is discriminatory really. I don’t want the government making decisions for me. I want to make my own decisions for my future pension arrangements the same as other pension customers.
  • JoeCrystal
    JoeCrystal Posts: 3,028 Forumite
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    edited 26 November 2017 at 5:24PM
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    Mpb wrote: »
    There are a couple of options tbh but I’m struck by the fundamental difference in attitude. When I joined nearly 30 yrs ago I was told I’d be paying pension contributions to MY pension pot - ie paying into my own scheme. Not paying to an IOU scheme. And for the rules for pensions to be changed to grant “freedom” for everyone else but not CSP is discriminatory really. I don’t want the government making decisions for me. I want to make my own decisions for my future pension arrangements the same as other pension customers.

    Then I am really glad that you don't have a choice. Just stick with it and be happy that you got a brilliant scheme that cost you a pittance. It doesn't stop you from making other pension provisions on top. Let use the current one to show off how good it is.

    A 21 years old civil servant earns £24,000 salary and can retire at Nuvos Pension Age of 65
    Contribution Rate for that salary is 5.45%
    So contribute £109 per month.

    Working until 65, the civil servant accrued 44 years of built up pension.
    Each year give the civil servant 2.3% of the pay each year.
    Assuming the cost of living increase is 2% and the payrise is 2%.
    Then in theory, one could get an annual pension of £18,000 in today's term (limited by 75% of the highest earning in one year)

    To get something like that with a DC pension and opting for an annuity, that 21 years old would need to put aside 63% of the salary (or £1,260 per month) for forty four years to reach £18,000 a year income with index-linked increase of 3% and 5% annual growth on the calculator. And that is without any ill health retirement, death in service benefit and so on.
  • TARDIS
    TARDIS Posts: 160 Forumite
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    It is not discriminatory - plenty other DB schemes restrict transfers out, mine included.

    Be thankful for what you have - most people paying considerably more than you have into a DC scheme will get nowhere near the guaranteed income you will.
  • Mpb
    Mpb Posts: 6 Forumite
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    It’s scary that so many have the attitude that nanny knows best. Whatever happened to being an adult and being able to make my own choices, whether good bad or indifferent? Whether it’s a “good” plan or not is irrelevant the issue is that people are being prevented from having any choice at all. The only choice we have is to just get on with it. What if the goalposts get moved again in future? With the attitudes shown on here it’s not out of the realms of possibility that that will happen. Maybe I’m
    Just too libertarian and want to be responsible for my own choices now that I know more than I knew as a you person starting out in the working world.
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