Worth joining pension?

t0rt0ise

Hi all,

I am 58 and due to retire at 66 so have 8 years left to work. I have been working part time (18 hours) at a low grade in the NHS for a year and a bit and joined the pension scheme. Now my temp contract has ended, I have another 16 hours a week contract for 8 months or so and I would hope to get something else after that and continue.

But is it really worth my paying into the pension scheme for such a short time or should I cancel and reclaim my money while I am still able?

Anyone got any opinions?

CLAPTON

if you already have more than enough to retire comfortably then it doesn't matter what you decide
otherwise join as it's a great scheme .. maybe read the terms sometime?

t0rt0ise

I won't have a great pension when I leave. I have read the terms but it's very difficult, for me at least, to work out how much I'll get at the end of it. Probably not very much and it may be better to have the money now. I know that nobody can know either but just wondered what others would do.

Really, I just want to talk to someone about it but have nobody so came here. If that doesn't work and nobody has an opinion then fair enough, I'll just talk to myself again.

Linton

A Final Salary scheme is particularly generous for the final years of your career. For example if it is a 1/60 scheme for which you pay 10% annually, 10% of your final year's salary gives you 1/60th of your salary for perhaps 25 years. You will get that back in your first 6 years of retirement with the remaining 19 years free, and that's neglecting inflation increases. If you didnt pay into the pension but invested the money instead there would be no time for the pot to increase in value before it is needed to provide an income.

stinktankcynic

Linton wrote: »

A Final Salary scheme is particularly generous for the final years of your career. For example if it is a 1/60 scheme for which you pay 10% annually, 10% of your final year's salary gives you 1/60th of your salary for perhaps 25 years. You will get that back in your first 6 years of retirement with the remaining 19 years free, and that's neglecting inflation increases. If you didnt pay into the pension but invested the money instead there would be no time for the pot to increase in value before it is needed to provide an income.

Also if you leave, the value increases each year NY a certain percentage, good in bad economic times.

jamesd

The NHS scheme is a good one and as Linton has written, schemes like it are a particularly good deal for those near to retirement. I suggest that you use it for as long as you can. It'll pay you more than just about any other retirement income provision you could arrange for the money.

atush

Stay in the pension. Nothing you can do with the little you put in, will bring you as much.

t0rt0ise

Okay thank you. It seems that everyone thinks I should stay in and I think that's what I'll do.

My only other pension is another small pension with Saul and deferred until retirement. I don't understand that one either as it seems that I can get it at 60 with no loss but I may be reading it wrong as it doesn't seem to make sense. I shall email them to ask.

atush

If you can take it at 60, find out what happens if you don't (will it grow larger etc). If it won't, then you should take it but you'll pay tax on it (apart from any TFLS).

If you don't need the income, think about putting it into another pension so as to save on tax paid.

t0rt0ise

Thanks, I'll find out.