police pension

daisymay2008

hi just a little advice if anyone could help....

i have paid into my police pension for 11 years, (obviously it is being tinkered with by the govt)

i have accrued around 44k or there abouts and contributions come direct out of my salary....

i made a tentative enquiry with the pension dept at work about coming out of the pension and my options of what to do with the money i put in, apparantly i cannot have the cash back, and if i could i would and buy a property to rent out

they have said i can either transfer into another pension or a sipp?

my idea was if i could get my hands on the cash i would buy a buy-to-let property (15 year mortgage) then with the money i was paying into my pension use that to overpay on my mortgage so in 10 years i would be mortgage free at the age of 42 and hopefully mortgage free on the rental property at age of 47, from the age of 42 when mortgage free i could easily save £10k a year

the impression i get is this isn't allowed, so if i put it into a sipp is there anyway i could unlock the money to go with my preferred plan? or is it a case i can only put it into commerical property (of which i have no knowledge and ignorantly seems very risky)

Linton

You cannot get money out of a pension until you are 55, unless you are at death's door.

Assuming that this is a standard police final salary based scheme...

The money you get from your police pension scheme to transfer to an external one is likely to be worth far less than the pension you would be giving up.

In any case it seems that the pension providers may not accept a transfer-in without IFA approval as they are afraid of being sued for mis-selling for the reason given above. An IFA is unlikely to give approval for the same reason.

Leaving the police scheme is likely to be a major financial mistake. The tax payer is contributing a large amount to your pension, why do you want to reject this money?

CLAPTON

complete and utter madness

the police pension is just about the best there is; madness to leave it and madness to move it.

do yourself a favour find out the full benefits of the pension before doing anything

atush

First of all,' tinkering' or not- you have one of the best pensions in the UK. So,even if you could (and I don't think you can) move it- dont. Any move would have to be signed off by a certified professional IFA- who would not because in 99.999% of cases it would not be the best thing to do for you- and they are afraid you would sue them (like many who have done it in the past have done).

So, you put 44K into yourpolice pension over 11 years? 4K per year approx? That is nothing, the govt will have put in another 100-120K or more during that time. And that is what you would give up if you stopped paying in. 'Tinkering' or not, the govt puts in 2-4X as much as the worker does to pay for an indexed pension of a guaranteed amt, plus indexation, plus spousal benefit plus death in service etc.

So, you think you can do something with your 4K per year, that will be better than the 12-5K that the govt and you put in together? Good luck with that. It is simple maths and unless you pick the next apple or are extremely lucky there is nothing you can do with your 4K that will match your police pension. esp as one of it's features is the early retirement age (which you can't match with any other pension).

And that doesn't even begin to cover the whole property thing. If you want one, save for it? But it isn't the gravy train you will be lead to beleive after mtg costs, taxes (property and income), void periods, maintenance, vandalism, insurance etc.

Honestly, we appreciate your service and want the best for you. And that is staying in your pension, and appreciating it for what it is, and not what your union is telling you.

daisymay2008

thanks for the replies especially atush, it was only a tentative enquiry i certainly wouldn't do anything rash anyway until the final outcome from the various reports etc which could easily be another 12 months

nobby24

Yes, I was in a company pension scheme and a few years ago the company started 'tinkering' with it and a few people decided to leave it. I can tell you now that any who did come out deeply regretted it!

somethingcorporate

You'd need to be completely insane to go through with your current plan. Luckily finding an IFA to sign it off would be near impossible (they'd have to be equally insane).

This is one of the (if not the #1) pension available to anyone in this country and to leave it is really lunacy.

Your plan is pitifully poor compared to the benefits and guarantees you have by keeping that pension. If you are desperate to give away hundreds and hundreds of thousands of pounds I will IM you my bank details.

molerat

daisymay2008 wrote: »

thanks for the replies especially atush, it was only a tentative enquiry i certainly wouldn't do anything rash anyway until the final outcome from the various reports etc which could easily be another 12 months

Which will have absolutely zero effect on the fact that this pension is way above anything else you can get.

BlueCow1975

I read this with interest.

My DH has been contributing to his police pension for 13 years. His contributions have now gone up by around £70 - £80 a month I believe.

Obviously, when he joined the scheme was always contribute for 30 years and then reach retirement age (which for him would be 56). They do pay a lot into it but it is a brilliant scheme. It would appear that the goal posts are now going to be moved. He informs me that for those under 40 and with more than 10 years to serve they are planning to increase the age of retirement to 60. For him that means working 4 years longer, paying a fair bit more and for no extra benefit. For some of his work colleagues it can potentially mean working an extra 9 years. As far as I can tell nothing is set in stone, but it is looking increasingly like this is on the horizon.

Apparently, he has the option of leaving work at 56 but would be unable to claim a pension until 60. There are also some suggestions that the final lump sum may be capped at 90k (which is quite a bit less than current depending on your rank). Obviously nothing is set in stone yet. Its all if's and maybe's but it is causing a lot of worry amongst the police.

Now it would appear that a lot of bobbies are looking at alternative sources of income to try and offer themselves a little more protection. I have heard a lot of talk among them about "pulling out of pensions and investing in property". Remembering that the world of finance, investments and pensions can make your head spin and bobbies are not always fully financially savvy (and I have to admit that pensions confuse the living life out of me!). So, thanks for the clarification Atush.

Bottom line is 30 years of working nights, afternoons, days, dealing with riots, fights and a whole host of horrific stuff is quite enough and I really do not want my own husband to be doing that until he is 60. There is the worry that the goalposts are going to continue to move more and more over the years and he wants to be in control of his retirement and not be a slave to the system.

I suppose the plus side is that he is 39 and I am 36 so we have time to "plan" a little more for our future but have really no idea what to look at / where to start. I work part time for the NHS (my own pension is not brilliant due to part time hours and we are trying to be persuaded that working until 68 is a good idea!). The pension schemes clearly are great when we can claim them, but we need to be thinking about what else we can do now to give us the opportunity to finish work before our mid 60's should we choose to.

jamesd

Pulling out of a pension as good as this one is and will be would be foolish.

That doesn't mean that he and the others have no options. They can do the same thing as the rest of us can, invest in whatever we like and use the gains from that to help us to retire at whatever age that lets us afford to retire at on our desired income level.

As with many other things this is a compromise of lower spending today for increased benefit for earlier retirement later. Each person will choose a different balance between spending today and spending tomorrow.

Andy_L

BlueCow1975 wrote: »

Apparently, he has the option of leaving work at 56 but would be unable to claim a pension until 60. There are also some suggestions that the final lump sum may be capped at 90k (which is quite a bit less than current depending on your rank). Obviously nothing is set in stone yet. Its all if's and maybe's but it is causing a lot of worry amongst the police.

The 13 years he's accumulated under the current scheme will keep the old rules. It is only future service that will have the worse terms