Buy-back years?

jammyjam

I am in a Local Government pension scheme and have been for about 12 years. I heard about the possibility of buying back earlier years in the pension, before I started work. As I didn't start my career until 29 years old I wondered whether this would be a cost effective route to take. As the scheme is still a good one I would rather enhance my provision in the existing scheme than take out seperate private provision.

dunstonh

buying years, if that option is available to you, is usually the most expensive option up front but the one that would provide the most benefit at the other end. So, it may cost you more but it should give you more.

You do have to check what they will give you though for the amount you are willing to spend. It may not be cost effective (although you would expect it to be).

CAE

You can only commence buying added years in the LGPS with effect from your next birthday, and will also need to complete a medical form.

I suggest your contact your pension administrator and ask for a quote for buying added years. Do this now before your birthday, so you give yourself time to work out if this is what you want to do. Obviously if you are near to a birthday that is even more reason to ask for a quote ASAP.

The quote details should tell you how much it would cost (as a percentage of your salary) to buy one additional year, and also tell you how much the additional benefits would be worth (based on todays salary). Youwould get extra pension and lump sum. There is a lot of information available, which should be made available with your quote. The maximum additional membership you can buy is limited to 6 2/3rds years.

Hope this helps.

jammyjam

Thanks for the advise. I just had a significant birthday (40) two weeks ago which got me thinking about it.