civil service pension

movingforward2010

Im currently paying in to a civil service pension in work @£49.85 a month (says my employer is paying in £192.82 a month aswell) , im new to all this money saving stuff:p and totally confused about pensions. Im 24 and being paying in for the past 4 years, i ve heard all these stories about pensions not being worth anything in yrs to come, is it worth me paying in?? or should i just be saving my £49 to go in to a savings account.

be nice im new and unsure about pensions

dunstonh

i ve heard all these stories about pensions not being worth anything in yrs to come

Which has nothing to do with you or the vast majority of the country. The issues over pensions not being worth anything reflects a minority of people with failed schemes or where people are not paying enough in to it (some people believe that paying in £50pm for 25 years is going to pay them £1000pm in retirement for 25 years which is clearly misplaced.)

is it worth me paying in??

You basically have one of the best pensions in the country.

or should i just be saving my £49 to go in to a savings account.

To match the benefits of the occupational pension would require you to pay around 20% of your earnings into that savings account. Your £49 would be nowhere near the required amount.

Gorgeous_George

dunstonh wrote:

To match the benefits of the occupational pension would require you to pay around 20% of your earnings into that savings account. Your £49 would be nowhere near the required amount.

Perhaps 20% of his earnings are less than £49 - he's a poorly paid civil servant remember!



GG

Andy_L

wxmlad wrote:

(says my employer is paying in £192.82 a month aswell)

That implies you're in the "partnership" civil service pension which is the optional defined contribution scheme rather than the final salary "premium" scheme as that's the only one where the employer makes a contribution to your pension.

Have you looked here:
http://www.civilservice-pensions.gov.uk/

Hereward

Andy_L wrote:

That implies you're in the "partnership" civil service pension which is the optional defined contribution scheme rather than the final salary "premium" scheme as that's the only one where the employer makes a contribution to your pension.

Have you looked here:
http://www.civilservice-pensions.gov.uk/

Oops, I thnaked insted of Quoted, D'oh! If you read the how much does it cost section of the listed website, employer contributes to both the Premium and Partnership pension schemes; hwoever, they amount contributed varies between the two schemes.

Andy_L

Hereward wrote:

Oops, I thnaked insted of Quoted, D'oh! If you read the how much does it cost section of the listed website, employer contributes to both the Premium and Partnership pension schemes; hwoever, they amount contributed varies between the two schemes.

True, however it's difficult to find the amount contributed for the final salary schemes & the, self confessed, confused OP would be unlikely to know it to the penny.
Plus that money is then used to pay the current crop of retired civil servants rather than being invested for the future retirees (hence the variable "black hole" figure that gets bandied about in the press)

sleepless_saver

Andy_L wrote:

True, however it's difficult to find the amount contributed for the final salary schemes & the, self confessed, confused OP would be unlikely to know it to the penny.
Plus that money is then used to pay the current crop of retired civil servants rather than being invested for the future retirees (hence the variable "black hole" figure that gets bandied about in the press)

I'm on the final salary scheme and every month my pay slip says how much the employer's contribution is, so possibly not that hard for OP even if he is confused .

Andy_L

sleepless_saver wrote:

I'm on the final salary scheme and every month my pay slip says how much the employer's contribution is, so possibly not that hard for OP even if he is confused .

Interesting, mine (classic) with the MoD doesn't & never has. Could be a departmental thing then

homersimpson_3

To match the benefits of the occupational pension would require you to pay around 20% of your earnings into that savings account. Your £49 would be nowhere near the required amount.

how do you know this? what rate of interest would that savings account have to pay? is it 20% of net or gross income? does percentage increase with age?

sleepless_saver

Andy_L wrote:

Interesting, mine (classic) with the MoD doesn't & never has. Could be a departmental thing then

Must be departmental then, I assumed it would be universal. Mine is classic plus (but not MoD). Employer's contribution about 2* mine.

dunstonh

how do you know this? what rate of interest would that savings account have to pay? is it 20% of net or gross income? does percentage increase with age?

I dont know this. Unless you sit down and calculate the figures, there is no where to work out the benefits exactly. However, it is generally considered as a rule of thumb that a Govt final salary pension and attached benefits is worth between 15-20% of your salary.

The percentages wouldnt change much with time as one scheme is based on years of service and the other the amount you invest. the later you leave it to join one the scheme or make personal arrangements, the more both will cost.