Is there a point in Pensions

fairleads

Is there a point in Pensions?

For a BR taxpayer i would venture - only if you can't think of a better place to put your retirement savings.

jem16

fairleads wrote: »

Is there a point in Pensions?

For a BR taxpayer i would venture - only if you can't think of a better place to put your retirement savings.

In the OP's case ( which after all is what this thread is about ) there is no point in not joining the pension scheme even as a BR taxpayer.

Why on earth would anyone throw away almost 20% of their salary?

chucknorris

Tom_Brine wrote: »

Thanks guys I have decided I am going to stay with the pension scheme the university offers as I can still save for a deposit whilst paying into it. Better to entertain multiple possibilities than throw all of your eggs into one basket.

Right decision, I too work for a university and I think the pension scheme is so good that I am paying an additional 25.5k for the next 3 years buying additional pension from the scheme.

fairleads

jem16 wrote: »

In the OP's case ( which after all is what this thread is about ) there is no point in not joining the pension scheme even as a BR taxpayer.

Why on earth would anyone throw away almost 20% of their salary?

The OP stated that a) they are young, b)they have ambitions beyond their current employment - possibly beyond being an employee?
Further, they are not 'throwing away almost 20% of their salary' they would just be foregoing their employers contribution which although considerable is not really part of their salary. I did this many years ago and never - inspite of the derision received at the time - have i regretted it.

jem16

fairleads wrote: »

I did this many years ago and never - inspite of the derision received at the time - have i regretted it.

More fool you then.

Let's say the OP contributed for just one year on a £30k salary. Cost is 5% after tax relief (assuming basic rate taxpayer) so £1500 contribution.

That sees 1/80th pension so £375pa and lump sum of £1125. So even with no index linking you've got your contribution back within one year.

Let's assume CPI of 2% - after 30 years that's now worth £679pa. If 40 years it's £828pa. Lump sum will also increase so £2038 after 30 years or £2484 after 40 years.

Sorry your logic makes no sense.

fairleads

jem16 wrote: »

More fool you then.

Let's say the OP contributed for just one year on a £30k salary. Cost is 5% after tax relief (assuming basic rate taxpayer) so £1500 contribution.

That sees 1/80th pension so £375pa and lump sum of £1125. So even with no index linking you've got your contribution back within one year.

Let's assume CPI of 2% - after 30 years that's now worth £679pa. If 40 years it's £828pa. Lump sum will also increase so £2038 after 30 years or £2484 after 40 years.

Sorry your logic makes no sense.

The fact my logic makes no sense to you is immaterial because my blogs aren't based on third party opinions or assumptions and neither are they influenced by your childish insults. My blogs are based on the cold reality of personal experience. Further, final salary taxpayer funded pensions are probably unsustainable over the long term because your partner, Gov.uk. is essentially insolvent.

jem16

fairleads wrote: »

My blogs are based on the cold reality of personal experience.

The cold reality is that your decision has likely cost you thousands. If you were happy to commit financial suicide then great but please don't try to advise someone else to do so too.

Further, final salary taxpayer funded pensions are probably unsustainable over the long term because your partner, Gov.uk. is essentially insolvent.

My calculations are based on one year into a current final salary pension which then became deferred. That one year is protected as accrued benefits and is not based on whether or not final salary pensions are sustainable over the long term.

Anyone not taking advantage of a final salary pension needs their head looking at.

lesstoinvest

Tom_Brine wrote: »

I had only been paying into it for 7 months so didn't see the point of keeping it. It may have been a bad move but all I ever hear about pensions is that you don't get out of them as much as you pay in. That youll be working untill your 70 etc, theres not much positive praise of them about and it worries me.

The pension I am with is run by Exeter University and seems like a good thing if you were to be here for a long time.

You get

1/80 x Career average salary x service in years = yearly payment

and a lump sum of 3 x yearly payment on retirement

I pay 6.25% of my monthly pay into the scheme

It says the university pays 19% contriubution for me?

You might want to consider paying more. You can contribute up to an additional 15% of your salary to buy extra years. Check the details and consider this carefully....

atush

fairleads wrote: »

The fact my logic makes no sense to you is immaterial because my blogs aren't based on third party opinions or assumptions and neither are they influenced by your childish insults. My blogs are based on the cold reality of personal experience. Further, final salary taxpayer funded pensions are probably unsustainable over the long term because your partner, Gov.uk. is essentially insolvent.

The cold reality is, you made a huge mistake and the fact you can't see it is quite frightening.

atush

lesstoinvest wrote: »

You might want to consider paying more. You can contribute up to an additional 15% of your salary to buy extra years. Check the details and consider this carefully....

I agree, I would look into this.