WHAT TO DO, POLICE PENSION ETC private isa

tarquinbrandruf

I was wondering if anyone could give advice as its a mine field out there.

I am a police officer, and have been for 2 years and so I am on the new police pension of 9% of my salary, I am 44 now and so will have when I retire 15 years police pension.

I also have 17 years of a unilever pension, transfere value about £75,000 , and 8 years nilitary pension which equates I believe to about £40,000 transfer value.

I applied to transfer these over to my police pension but unilever only got me 6 years 79 days , and army pension got me 4 years 133 days, so as you can see I don,t know whether to go ahead and transfer them or not, as I will only get almost 12 years with them. intotal it will all add up to 27 years service , 7 years short for maximum pension.

to buy 5 years back its a further 28% of my pay each month, incredible dear.

any ideas would be appreciated.

kev

Andy_L

The uniliver & mill pensions buy you less service in the police scheme because the police scheme is so much better (which is why buying 5 extra years is "incredible dear").

The question is how much will 12 years in the police scheme be worth compared to leaving them where they are, considering that the police pension will increase with salary whilst the other 2 will only increase with RPI.

missile

Transfer may be your best option. However, without looking at the figures it is difficult to do more than guess.

I would suggest you speak to the advisor for police scheme asap.

tarquinbrandruf

Thanks for your advice, the problem with the pension company that runs for the police is that they will not give advice.

I am concerned that a FINANCIAL ADVISOR would recomend what suits them and not me .

I have been told that the death benifits and the actual pension with unilever are good and possible to leave them, and transfer the aemy pension and then set up a svings plan, or isa.

kev

EdInvestor

It seems unlikely you can better your current arrangements unless you think you will do very well in the police and your salary will zoom up.

Ian_W

First off I understood you had to transfer in any other pensions within the first 12 months but if that isn't a problem - I would be absolutely AMAZED if leaving things as they are is your best bet. Still life continues to amaze me so I could be wrong! But even the 2006 PPS is still Final Salary, just the accrual rates are worse and the service needed is longer.

Andy_L wrote:

The question is how much will 12 years in the police scheme be worth compared to leaving them where they are, considering that the police pension will increase with salary whilst the other 2 will only increase with RPI.

That's the question but even as a constable, subject to satisfactory annual appraisal, there is a 10yr incremental pay scale, so the point the OP is at now will increase by almost £9K (at to-day's rates) even without any cost of living increases. Whilst all public sector workers are probably going to see less than RPI increases for some time to come over longer periods pay generally increases by more than RPI and if the OP were to gain just one promotion his pay would be 50% more than it currently is at the top of the sergeants pay scale.

Being told survivor benefits are "good" depends on what you're comparing unilever with and it might be worth finding out but the 10+yrs would straight away count towards them with the police. As it would with ill-health/injury benefits should your career finish prematurely for health reasons - would unilever or the army pay out if you were invalided out of the cops?

Pensions advice is regulated so the Scheme can't give it as they're not qualified to, can only tell you their benefits.

I am concerned that a FINANCIAL ADVISOR would recomend what suits them and not me

That's a bit daft. You'd be asking a pensions qualified IFA to do a Transfer Value Analysis - a report to answer "do I go or do I stay?" not really giving an opportunity to sell you something else unless they can document that the something else is even better! There'd be a fee to pay - you don't work for nowt, so why should they? But that would give the definitive answer or you can go with your own gut feeling after listening to people you don't know on a forum - bit like having a chat about it down the pub and probably just as informed!

EDITED just to add: Your title mentions private ISA, yes it would be a good idea to use your ISA allowance each year to up your pensions savings outside the scheme. Almost certainly won't provide as much as buying the added years but will help to fund your retirement.

tarquinbrandruf

Appreciate the replys, Ian W , much appreciated.

I am at this time allowed to transfer after the 1st 12months , problem there is that no one from the police pension told me I would get pref rates, or I WOULD OF DONE IT THEN.

I have applied to transfere my army pension, but at this time I am still stuck on what to do with the unilever pension., it currently offers £8000 ayear pension , I suppose that is if I leave it in till I am 65.

kev

exil

EdInvestor wrote: »

It seems unlikely you can better your current arrangements unless you think you will do very well in the police and your salary will zoom up.

Sorry, this sounds absolutely incredible. The police pension scheme accrues at 1/70 and you can retire with an unreduced pension at age 55. This is why it's expensive for the OP to buy added years. Even if he is promoted only once, or advances from the bottom to the top of the scale for his/her rank, it will almost certainly be better to transfer in.

MInd you the OLD police pension scheme was even better, 1/60 accrual rate with 2/60 after 20 years service with a max pension of 2/3 salary (compared with 1/2 in the new scheme)

tarquinbrandruf

At 57 years old when I retire I will only have in 27 years in the pension fund though, when I need 35 to get a decent pension, a short fall of 8 years .
I am waiting on a figure to buy back 5 years , but my understanding is that I have to pay that every month from now untill I am 55, I think that is going to be about 250 pound every month , and will go up as my pay goes up.

I could invest that else where and make more than that would give me back.

kev

Ian_W

Based on your current pay transferring unilever to PPS would give you about £2,400pa extra police pension (if my sums are right) which doesn't look good compared with £8K at first glance. However:

• Unilever will only ever be worth £8K (in real terms) whereas your 6 and a bit years will be of your final salary which if you stay a PC increases by about 30% on the incremental scale. If you get just one promotion and reach the top sergeants rate that's 50% more than you're on now and both ignore the fact that pay tends to exceed inflation over the long term.
• It will count towards survivor benefits and ill-health straight away - I'm fairly sure unilever won't pay a pension in the latter circumstances but I don't know what survivor benefits they pay to deferred pensioners.

• If the UL retirement age is 65 you'll be getting the benefits 8yrs earlier.

I could invest that else where and make more than that would give me back.

Care to share where that would be?

It is expensive because there is no employer contribution (there is no benefit to them) and if it's unaffordable then put money into ISA's as an alternative but don't kid yourself - you won't get anywhere near 10% extra pension based on final salary at age 57 for the rest of your life.

tarquinbrandruf

Ian w,
you make a lot of sense and obviously know what your talking about.

What frightened me is the overall 27 years only pension, its 8 years short and so I will get penialised for taking it at 57.

I may consider buying the 5 years , I will let you know more when I get the figures through, and I might transfere my unilever also now reading what you have said, as it makes sense in my limited understanding.

I don,t see how I can save enough money really if I buy the 5 years to top up my lump sum as I cannot afford 2 pay my pension, my top up pension, and a savings plan , along with mortgage etc.

kev