LGPS Amendments - Should I Leave?

jon-e-boy_4

Hi there

I am looking for some advice on the new regulations that mean I will have to work to 65 if I dont want to get a reduction in my pension!
I am 34 years old and have 10 years in The Local Government Pension Scheme pre the new regulations starting in April and I am considering freezing this pension and starting a Stakeholder Pension.
Will Local Government match contributions into a Stakeholder (long shot this one)?
What percentage of my salary should I be paying in?
Good move - Bad move??
Any better ideas?
Basically I dont want to work untill I drop especially when our honourable MP's have protected themselves so they don't have to!!

Any help is grealy appreciated.

Debt_Free_Chick

There is no way you could replace your LGPS pension with contributions to a stakeholder. No ... I don't believe that your employer will contribute to a stakeholder, but you should check with them.

You say you have to work to 65 for an unreduced pension. Have you considered what the reduced pension would be at 60 and considered how you could make up the difference by paying extra contributions?

Also .. surely, the 10 years you've already done would still be paid unreduced at age 60? So the change is not retrospective and only affects the pension you build up in the future.

HTH

jon-e-boy_4

Thanks for the reply.
Looking at the figures, say i retire at 60, I have 10 years at no reduction but 26 years of acturial reduction at 33% on pension and 11% of lump sum.
Due to the extent of these losses would it then be better investing say in a stakeholder where I could then retire with no loss and then this would be topped up when I'm 65 with my LGPS.

Debt_Free_Chick

Due to the extent of these losses would it then be better investing say in a stakeholder where I could then retire with no loss and then this would be topped up when I'm 65 with my LGPS.

Only if you could put enough money into a stakeholder to produce the same pension & cash sum.

have a play with this calculator http://www.pensioncalculator.org.uk/pages/home.php

Would be interested in the results, so please post back

jon-e-boy_4

Cheers, will have a play.

Pal

The answer is almost certainly no, you should not opt out of a LGPS in order to take out a stakeholder. If you take out a stakeholder you have to pay the employer contributions that would have been paid into the LGPS as well as your normal contributions. It would cost you a fortune.

Stick with the LGPS. By the time you reach 65 it is going to feel like early retirement compared to everyone in the private section who will have to work to 70+.

dunstonh

You wouldnt find a financial advisor that would set up a pension to a non-joiner of a LGPS. Yes, they would do it incremental to the scheme but not a replacement.

Are you sure you could have retired at 60? Most people like the idea of that but cant afford to do it without the state pension to make up the pension.

jon-e-boy_4

Just seen on the news that the strike has been called off for Wednesday with the Government looking again at its proposals to LGPS. Could be a sniff of the election in the air. . . . or perhaps John Prescott was reading this thread!!!!!
thanks for the current comments