If I stopped paying my Civil Service Pension Contributions..

Andy_L

CKhalvashi wrote: »

It’s not a case of not paying into scheme, it’s a case of the people like my mother (who’s 55 with 21 years NHS contributions) that are being told they may lose the 3x salary, which would pay her IO mortgage. This is one of the reasons that she didn’t go private 20 years ago.

Since she's within 10 years of retirement she will see no change to her pension. BTW its not (and has never been) 3x salary, its a 3x pension lump sum

CKhalvashi

BobQ wrote: »

Being told by whom?

There is no change proposed to the pension accrued up to 2015 (ie your mother will still get a pension and lump sum based on accrued service in the current scheme but based on her final salary at a later date - when she retires.

Those that transfer to the new scheme will still earn additional pension at 1/57 of salary per year, indexed at CPI +1.5% and can commute part of that pension to a lump sum at the new retirement date.

As your mother appears to be within 10 years of NRA she will benefit from the transitional protection so at that age she will get the same pension and lump sum as she would have done.

dunstonh wrote: »

Who is telling her that? There are no changes like that proposed on built up entitlement that will affect her. So, either she hasnt understood the changes or she is being fed a line by someone (the NHS is prone to troublemaking myths more than any other profession - either the unions or some misguided work colleague causing trouble)

Andy_L wrote: »

Since she's within 10 years of retirement she will see no change to her pension. BTW its not (and has never been) 3x salary, its a 3x pension lump sum

Thanks for updating that, as it was something I wasn’t 100% on when she mentioned it.

Either I’ve misunderstood it, she has, or she’s been told something she shouldn’t have been (She’s not a native English speaker either).

OP is probably younger than 55, so it could affect OP.

CK

bigfreddiel

robbiez666 wrote: »

I'm pretty sure, the way politicians are going, that I will be working to the state pension age whether I like it or not.(they can basically do what they want to do with our pensions, and if not, they will just re-write the law so they can)

I just find it hard to see how making economies when I'm young(ish-35) and going without is sensible just so I can get enough?

It would seem that you get basic care and assistance if you have nothing so why bother spending your entire life frugally to get a similar amount to what you get if you saved nothing?

1 what exactly is missing from your life right now that by stopping your pension payments is going to make better?

2 whats your definition of frugally - i guess you have tv iphone tablet car house mortgage/rent holidays meals out pub club and so on - this is sort of linked to 1

3 could you live on £102 / week now - thats the state pension give or take a few quid - if not then you have your answer - thats your lot at 70 - and remember - right now 60 is the new 40 because thats how old i am and how old i feel

at your age i too thought paying into a pension was a waste of time - now i'm glad i did and wished i'd paid more - looking forward to life on £12k - if i had no pension i would be looking forward to 4 yrs more work and only £7k (sp) - as it is in 4yrs i'll be on £20k+ - bring it on.

fj

zagubov

Hold on, pal- been there, done that. Want some advice?

Did what you're suggesting donkey's years ago. Biggest mistake of my life. Whoever's advising you that this is good needs a checkup from the neck up.

I 've spent years trying to put it right with endless endless hassle. Buying back extra years to fix it has been a nightmare itself - bought past added years from my pension agency plus things called AVCs that were 4x worse value, took me years to realise it and I've now wasted a years salary trying to fix it and not succeeded.

Plus every employer finds they mess up the complicated overpayments I now use to fix it.

Absolutely 100% bad move. It's nobody's job to tell you this so let me make it my job right now as a favour to you.

By all that's holy, don't follow my footsteps; keep to the path and keep paying in. If I can save one person from making this c0ck-up I made I'll get a fragment of comfort from that.

Millie_Millsters

dimbo61 wrote: »

This also provides life assurance of 2X income in case you died while working.
Have a look at other spending if you need to cut back

The OP may not think it's relevant to him but my husband paid into the Civil Service pension for 36 years until he unexpectedly "died in service" at the age of 55. I didn't appreciate it at the time but the lump sum was a life saver for me. It gave me time to grieve instead of having to worry about how I was going to pay the bills.

Yes, I know... none of us expect to die early (the talk is always about retirement) but it happens...

seven-day-weekend

robbiez666 wrote: »

I'm pretty sure, the way politicians are going, that I will be working to the state pension age whether I like it or not.(they can basically do what they want to do with our pensions, and if not, they will just re-write the law so they can) But whatever the State Retirement age is, doesn't mean that you won't be able to draw your Civil Service Pension earlier.

I just find it hard to see how making economies when I'm young(ish-35) and going without is sensible just so I can get enough money to "live on" when I retire at the age of 70+. When you are 70+ you will be glad you did. I'm 62 and I wish I could have paid MORE into my Local Government Pension Scheme

It would seem that you get basic care and assistance if you have nothing so why bother spending your entire life frugally to get a similar amount to what you get if you saved nothing? How do you know what Benefits there will be in 30 years time? Much better to make your own provision

See my comments in blue above. It would be absolute madness not to pay into this scheme.

ROBBIEZ666

Thanks for all the responses.

I think I would be more naive to blindly keep paying into a pension scheme without questioning if there was any point. I've been in the CS for 7 (long) years.(the 2 years refers to what the drones tell you when you ask how much money is in the pension pot-I transferred some in),

I don't drive, don't own a house, no long holidays in St Tropez, single, no children (basically the government does nothing more me)

My point was:

Would it not be better to enjoy life at a younger age and be more frugal when I retire than the other way round? In a couple of years, my contributions are likely to be £100 pm net. That adds up to at least one holiday per year for a start.

I believe the basic state pension is £107.45. There's no point owning a property when you retire a sit will just get used to pay for housing (and probably medical treatment given the direction the NHS is going in). I will have no reason to save anything (as no one to leave anything to) so it would be a case of hand to mouth.

At the end of the day, there's a decent change that I'll die without receiving all my pension. I have every intention of working as long as a can.

seven-day-weekend

OK. Your choice. Hope you don't regret it.

tocsin

... "repent at leisure" (that was about marriage, but could also apply to un-funded retirement).

hugheskevi

I think I would be more naive to blindly keep paying into a pension scheme without questioning if there was any point.

As a general rule, it will almost always be right to contribute enough money into a pension to get the maximum employer contributions available.

Then assess whether pension saving is the best course of saving for additional funds, or whether alternative saving vehicles would be better.

I've been in the CS for 7 (long) years.(the 2 years refers to what the drones tell you when you ask how much money is in the pension pot-I transferred some in),

So you will either be in a final-salary scheme payable from age 60 based on half-final salary with automatic lump sum, or two-thirds final salary.

Whilst NUVOS is of questionable value, those schemes are fantastic, and even with big hikes in contributions it is very unlikely that you can beat them using any alternatives. So best just to suck-up the pension contribution increases.

Would it not be better to enjoy life at a younger age and be more frugal when I retire than the other way round?

Yep, nothing at all wrong with that.

Plan your lifetime income, and have more at the front-end and less at the back-end.

But when you do that plan, you will find that being part of the pension scheme is a no-brainer. Otherwise you will end up having to choose between a combination of saving ridiculous amounts, working well past State Pension age, or living an existence where you have to save for 6 months to afford a minor car repair (if you can afford to run a car in the first place).

Think of it in terms of balance - you wouldn't take out a Payday loan to fund an extra party at the weekend, as the costs would be too high. But you might borrow to buy a car - the cost of borrowing being much lower. Sacrificing pensions like the one you have is equivalent to setting off on a reckless borrowing spree in terms of overall cost.

I believe the basic state pension is £107.45. There's no point owning a property when you retire a sit will just get used to pay for housing (and probably medical treatment given the direction the NHS is going in). I will have no reason to save anything (as no one to leave anything to) so it would be a case of hand to mouth.

An aim-low-and-achieve strategy.

Just to be sure, try living on £107.45 per week for 3 months. Given you are planning 25 or so years of that standard of living, it would be a wise precaution, just to make sure you will be happy with that.

At the end of the day, there's a decent change that I'll die without receiving all my pension

There is about a 14% chance you die before age 65, and a 53% chance you live to age 80 (source: UK life tables)

I have every intention of working as long as a can.

Retirement planning is a trade-off between saving more, working longer, and living standards both pre and post-retirement.

There is no need for an all-or-nothing approach - take the easiest ways of saving, work to a reasonable age, and don't demand the best of everything.

In this case, staying part of the pension is simply taking the easiest way of saving.