Civil Service Pension - no more lump sum, what to do?

baby_boomer

Gerrard - You sound the sort of person who would have traded Aztec gold for Cortes' trinkets. And you sort of realise that yourself.

Why not save for a deposit while house prices fall? That's surely a win/win situation without having to give up El Dorado.

cuiling

just have a look....

TREVORCOLMAN

baby_boomer wrote: »

Gerrard - You sound the sort of person who would have traded Aztec gold for Cortes' trinkets. And you sort of realise that yourself.

Why not save for a deposit while house prices fall? That's surely a win/win situation without having to give up El Dorado.

Similar to those who took out bigger mortgages in a rising market to fund a holiday or booze and fags and now complain their payments or too high!

GunJack

just to clear up....

the classic is an automatic lump-sum scheme, lump sum being 3/80th final salary, i.e. 3x the pension payable.

Under the later schemes (Premium) you can still take a lump sum, although the difference is that you don't have to - you accrue at 1/60 not 1/80, and so can achieve a 2/3 final salary pension. Some of this you can commute to give a lump sum at a reasonably favourable rate, and of course the lump sum is tax-free.

markeymark

just looking for some advice, im currently on the classic scheme, i have 16 years service and would like to leave my current job in 14 years time. Can anyone tell me if i can contribute more so i can have a better lump sum when i leave?

also whats the ealiest that you can get your lump sum

hope none of this sounds stupid....lol

Andy_L

GunJack wrote: »

just to clear up....

the classic is an automatic lump-sum scheme, lump sum being 3/80th final salary, i.e. 3x the pension payable.

Under the later schemes (Premium) you can still take a lump sum, although the difference is that you don't have to - you accrue at 1/60 not 1/80, and so can achieve a 2/3 final salary pension. Some of this you can commute to give a lump sum at a reasonably favourable rate, and of course the lump sum is tax-free.

The commutation rate (1:12) is an awful rate, however its (more or less) equivalent to the 1/80ths plus 3x lump sum of the old scheme.

Both schemes have now both been replaced, for new entrants, by "Nuvos" a career average scheme with a 2.3% accrual rate & a retirement age of 65.

Andy_L

markeymark wrote: »

just looking for some advice, im currently on the classic scheme, i have 16 years service and would like to leave my current job in 14 years time. Can anyone tell me if i can contribute more so i can have a better lump sum when i leave?

also whats the ealiest that you can get your lump sum

hope none of this sounds stupid....lol

The earliest you can take the pension is 65, if it's before 60 you will suffer a reduction in pension (~5% a year IIRC) unless you get early retirement as an alternative to redundancy

You have to take the lump sum at the same time as the pension

You cannot pay extra just to increase the lump sum.You can either buy "added pension" (which will increase the lump sum under classic as well) or go down the AVC/personal pension/stakeholder route.

If you just want a lump sum then ISAs may b a better option, have a look at the pension vs ISA sticky thread above.

markeymark

cheers andy for your help will have a wee look

Andy_L

Andy_L wrote: »

The earliest you can take the pension is 65, if it's before 60 you will suffer a reduction in pension (~5% a year IIRC) unless you get early retirement as an alternative to redundancy

Sorry, those ages should have been (as you're in classic)
earliest you cn take pension is 55, if it's before 60 you will suffer....

Dave81

Hi all,

I am on the Premium Pension, which I top up with added years of 3.14% a month, on top of this I have a AVC with Scottish Widows (the civil service one) this is at 5% per month. I can retire at 60 which is I think 2049 but may work past that.

What I would like to know is there a calculator anywhere that I could use to get a rough estimate as to how much I may be looking at getting when I retire. I have looked at my last 2 years pension forecasts but would prefer a calculator I could play with.