How to calculate your Nuvos Pension

jacton

Hi

I am about to join the Civil Service Nuvos pension scheme and am trying to find out how to calculate what my pension might be when I retire.

I was previously in a final salary pension and it there was a very easy calculation available to work out my final salary pension, but this Nuvos scheme does not seem to offer a similar facility.

Is there any way I can calculate what I might expect to get?

lseagle

It's 2.3% of your average salary. Easiest way to think of it is that each year you work you build up 2.3% of that years salary..
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jacton

I understand its 2.3% of my annual salary but that only gives me an indication of what is in my pension pot. how do you calculate what my annual pension will be from that.

You can total up all the years contribution which give you your total in the pot, but then what?

There must be some sort of calculation that gives you your total, the number of years you have paid in and then the amount you will receive depending on your age, but I cannot find this calculation formula anywhere.

sleepless_saver

It doesn't work quite like that. You just add all the 2.3%s together to get your final pension as that effectively averages it over your career. The amount you contribute to the pension which I think is currently 3.5% is different.

For example, if in year 1 you earn £10000, in year 2 £12000 your pension payable for those 2 years would be £230+£276=£506 before allowing for inflationary increases. Any future promotion will have an impact on your pension, as you will be getting 2.3% of your higher pay for each year you are in that grade.

So the answer to your quetion depends on how long you plan to work for, and how you expect your pay to progress over the years.

jacton

Okay many thanks I understand that.
Its just that I am starting a new job at the age of 57 after initially taking early retirement and am already receiving a pension from previous employment, so I was trying to work out what sort of new pension I could receive depending on which year I was to take formal retirement if I did not want to work until 65.

Using your figures as an example, if after two years I had £506 in the pot, and decided to retire, how would the pension administrator work out what my annual pension would be, or are these calculations not available for the public.

For my own satisfaction I want to try to work out if I could live on my original pension and the new one, (albeit small as it will be) but I just wanted to see if I cold afford to retire and live on these tow pensions, before I'm 65 and my state pension starts.

Andy_L

In "year 1" take 2.3% of that years, pensionable, salary then, every year until 65 (ie 8 years in your case)increase it by RPI
In "year 2" take 2.3% of that years, pensionable, salary then, every year until 65 (ie 7 years)increase it by RPI
In year 3....etc etc

As Sleepless said the amount you pay in (3.5%) is irrelevant

jacton

Hi Andy L

I understand that bit but if as in your example In "year 1" take 2.3% of that years, pensionable, salary then, every year until 65 (ie 8 years in your case)increase it by RPI'' apart from being able to do the increase I can roughly get a total of £3496 total, but how do I work out what my annual pension would be from this total.

Or am I missing something obvious in coming to a total annual pension, really not sure.

Andy_L

It will be year 1's calculation (ie ~£3496) plus year 2's plus year 3's etc.

CLAPTON

lets say you earn 20,000 per annum
and lets say that inflation is zero
and lets say you get no pay increases
and lets say you work for 8 full years

then each year you get 2.3% x 20,000 = £460

so after 8 years your annual pension will be 8 x 460 = 3,680 per annum

jacton

CLAPTON many thanks, so the number of years I pay in has no relevance to the actually total pension pot, except when calculating how much my annual pension will be. So my calculation should be 2.3% x annual salary x amount of years worked = annual pension.

Now I see I really was being thick

Many thanks to everybody for your help

Andy_L

jacton wrote: »

So my calculation should be 2.3% x annual salary x amount of years worked = annual pension.

Only if there is zero inflation & zero wage rises. However in todays low inflation/low (public sector) wage rise environment its a usable ball-park number