Civil service penison advice

chippy_250

I am a new starter (aged 20) and have been offered Nuvos or a paternership pension. Now I want to take the "live for now" way of thinking so I want to choose the cheapest method.
Here is where I've got to so far.

Nuvos: 3.5% fixed contributions - 1.6% cheaper NI = 1.9% Monthy cost for me.

Paternership: 0% Employee contributions (Civil service will pay 3% contributions regardless if I pay 0%.) + 1.6% extra NI = 1.6% monthly costs for me.

So... Partnership scheme is 0.3 % cheaper than Nuvos am I right?

So anyway I was given 3 stakeholder partnership comapnies to choose from. Standard Life, Tuc Prudential and Scottish Widows.
I rang them up and requested a free info pack, however, Standard life don't do free info packs so they're out the window.

That leaves me with Prudential Vs Scottish Widows.
Amc charge for Pru is 0.7% and SW is 0.6 % so SW seem like the best option for me. Now SW is also owned by my Bank Lloyds so that's a bonus.

Anyway, within Scottish Widows there are 4 choices. Cautious, balanced, adventurous funds or...Go it alone selecting and managing your own funds.

Assuming that all the information is correct, what advice would you give me on the four fund choices available within SW?

P.S. are AMC charges something you pay per year seperately or are they deducted from your pension pot automatically?

Andy_L

Partnership is cheaper, however the employers contributions in Nuvos are far higher than the 3% in partnership

NAR

Taking into consideration the track record of the 3 stakeholder companies I would play safe and go with Nuvos pension.

MrChips

Would you rather pay £100 for something worth £500 or £90 for something worth £200?

chippy_250

Yer but the thing is, shares at the moment are at a low price so I think it's a good time to by. I think I'm going to go for a high risk fund and cross my fingers. I'm not planning on making any contributions as it is. But I can always change my %, funds and even switch to a Nuvos. So I'm not stuck with what I have.

MrChips

With all the cuts and consultation going on with regards to public sector pensions, do you not think Nuvos could be closed to new entrants at some point?

You have to make your own decision, but speaking as a pensions professional I would personally choose Nuvos. However admittedly I don't know anything about your circumstances.

What makes you think shares are low in price at the moment? I'm not saying they're not but the FTSE100 is up 20% over the last 3 and a half months...

edinburgher

With all the cuts and consultation going on with regards to public sector pensions, do you not think Nuvos could be closed to new entrants at some point?

I doubt it.

I'm a member of the Nuvos scheme and while it's still a great offering, it's considerably less generous than the 85%? of civil servants who are on the older schemes. It has been reformed considerably and I've got my fingers crossed that it won't be changed as drastically as older, final salary schemes.

I think the OP will kick himself if he opts for Partnership instead of Nuvos - a few percentile points don't count for much when your future's at stake and the Nuvos scheme strikes me as a far better option.

Also, remember that you'll almost definitely be old one day, regardless of wanting to 'live in the moment'. I've never met someone who got a decent return from their contributions and regretted having a little less 'mad money' in their youth

MrChips

I also doubt it will be closed in the short term, but no one knows what things will be like in ten years time. I'm sure there are plenty of members of Nuvos who wish they had joined one of the earlier Classic or Premium schemes.

While career average in general isn't as generous as final salary, the accrual rate in Nuvos is much higher!

edinburgher

I also doubt it will be closed in the short term, but no one knows what things will be like in ten years time. I'm sure there are plenty of members of Nuvos who wish they had joined one of the earlier Classic or Premium schemes.

Long term, perhaps. Still, it only makes a more convincing argument for the OP to opt for Nuvos. I think talking about share prices etc. only distracts from long term planning, a bit too 'short termist' for me

Andy_L

chippy_250 wrote: »

Yer but the thing is, shares at the moment are at a low price so I think it's a good time to by. I think I'm going to go for a high risk fund and cross my fingers. I'm not planning on making any contributions as it is.

Why not? If you pay the 3%(?) you immediatly get that doubled by the employers matching contribution

Andy_L

MrChips wrote: »

I also doubt it will be closed in the short term, but no one knows what things will be like in ten years time. I'm sure there are plenty of members of Nuvos who wish they had joined one of the earlier Classic or Premium schemes.

They didn't have the option, it was nuvos or partnership