Join LGPS for 56 year old.....worth it?

aries1

Hi guys looking for some advice please.

Not sure whether to opt into this or not ???

What would you do ?

Times are hard for me and I could really do with the £38 pension contribution in my pocket now but am I being very short sighted?


I am told that if I made that contribution to the scheme for the next 9 years until retirement based on my current part time hours and pay I would receive a pension of arround £1200 gross per annum.

Not a fortune really and I am seriously considering not opting in.

Is it worth it for such a short space of time left to me on part time hours?

Any advice much appreciated

TIA

jem16

aries1 wrote: »

Hi guys looking for some advice please.

Not sure whether to opt into this or not ???

What would you do ?

I would join immediately otherwise I would be chucking away an employer contribution of around 15%.

Times are hard for me and I could really do with the £38 pension contribution in my pocket now but am I being very short sighted?

You are as it works out at £30.40 after tax relief.

I am told that if I made that contribution to the scheme for the next 9 years until retirement based on my current part time hours and pay I would receive a pension of arround £1200 gross per annum.

Not a fortune really and I am seriously considering not opting in.

You would be mad to opt out. It will cost you £3283.20 so in less than 3 years you have got back what you paid in.

Is it worth it for such a short space of time left to me on part time hours?

Very much so.

JoeCrystal

Yes! It is. Your salary might rise as well and that will improve the pension income. It is also indexed-linked for the rest of your life.

If I want to get £1,200 per year, RPI linked within the personal private pension scheme and took tax free lump sum, I would need a pension fund of £35,000 and IF I am lucky with the investments and such. That work out as £324 per Month.

Suddenly, that £38 looks a great bargain.

Cheers,
Joe

EDIT: Corrected per month to per year. Thanks gizmo111 for pointing that out.

CLAPTON

yes join

paying in peanuts and getting a very decent return

patanne

Join - your 65 year old self will be extremely grateful.

gizmo111

JoeCrystal wrote: »

Yes! It is. Your salary might rise as well and that will improve the pension income. It is also indexed-linked for the rest of your life.

If I want to get £1,200 per month, RPI linked within the personal private pension scheme and took tax free lump sum, I would need a pension fund of £35,000 and IF I am lucky with the investments and such. That work out as £324 per Month.


Suddenly, that £38 looks a great bargain.

Cheers,
Joe

its £1200 per year not per month!

bigadaj

gizmo111 wrote: »

its £1200 per year not per month!

Just a Minot typo, the other numbers are broadly correct. To pay in thirty quid a month and then get a hundred out, probably drawing for twice as long as paying , actually more than twice as long, is a hell of a deal, no investment would even come close.

gizmo111

bigadaj wrote: »

Just a Minot typo, the other numbers are broadly correct. To pay in thirty quid a month and then get a hundred out, probably drawing for twice as long as paying , actually more than twice as long, is a hell of a deal, no investment would even come close.

I agree - LGPS is still probably the best there is - but £1200 a month would be lovely.

hyubh

aries1 wrote: »

Is it worth it for such a short space of time left to me on part time hours?

Yes! Along with what the others have said, according to my back-of-an-envelope calculations, you will also benefit from the contribution bands going against actual not whole time equivalent pay from April 2014 - i.e., you'll probably drop down a band from 5.8% to 5.5% (if your current band isn't 5.8%, then you couldn't have quoted the correct figures - 1200 / 9 x 60 = 8000; 38 / (8000 / 12) = 0.058 = 5.8%, near enough).

bigfreddiel

i was 48 when i joined a similar scheme - civil service classic - i transferred other pensions which bought 18 years approx

Now i'm on £950/month after tax - joining the scheme was best thing I ever did

regrets - not buying more say £50/month would have been easy

hope that helps

fj

aries1

Thank you everyone for your helpful replies....it seems then that I should join up and think of the long term benefits.