Pre-tax saving options for firefighter or anyone.

peehead20

Good morning All,

Currently the Goverment are playing god with our pensions, I currently pay 9.6% pre tax to my pension which is £260 a month.

They are currently putting in plans from 2015 that will move everyone onto a 13.9% which will mean £363 on my wages will go into this pension pot.

At the moment when you retire you can get a lump sum of around £100k as you obviously paid that money in. I still have 29 years service and can't decide wheather to come out as on the new 2015 pension you can only get a 25% maximum lump sum on retirement.

I worked it out that if I did come out of the pension scheme and after all deductions I would only have £156 pcm to go into a ISA. over 30 years at £156pcm it will only get me £20k interest which is clearly not enough and this will be my only money and the state pension if it exists then.


Is there any scheme where I can put my money into a savings/ISA or similar before the tax man gets it. I've looked at prvate pension but not very vialble to my eyes.

Many thanks in advance.

le_loup

peehead ... very appropriate!
Do a search here on fire-fighters pensions.

lawriejones1

As someone who is essentially paid from our taxes, trying to find ways to avoid them seems a little, well, odd.

That aside, stick with the fire service pension and just hope that you get 29 years more service. I worked for them, great organisation to work for, but the politics might get you in the end.

Find some way to save a little more. If it helps, I've done a cigarette packet calculation and we broadly earn the same amount. I send 10% to my works pension, 5% to a self-managed private one, £250 (at least, sometimes £400 - £500) to a Stocks and Shares ISA and the rest gets spent on cycling, expensive cheese and wine and stupid things to make my house a little nicer and keep the missis happy.

IronWolf

Is it a defined benefit scheme or defined contribution scheme?

If its the former you would be mad to leave it.

And no you can't avoid taxes on earnings unless you use a personal pension scheme.

princeofpounds

I worked it out that if I did come out of the pension scheme and after all deductions I would only have £156 pcm to go into a ISA. over 30 years at £156pcm it will only get me £20k interest which is clearly not enough and this will be my only money and the state pension if it exists then.

Without commenting on your specific mathematics, I think you have really demonstrated your own answer here.

Even after this hike in contributions, your firefighter's pension is unbelievably, epically generous towards you.

JoeCrystal

peehead20 wrote: »

Good morning All,

Currently the Goverment are playing god with our pensions, I currently pay 9.6% pre tax to my pension which is £260 a month.

They are currently putting in plans from 2015 that will move everyone onto a 13.9% which will mean £363 on my wages will go into this pension pot.

At the moment when you retire you can get a lump sum of around £100k as you obviously paid that money in. I still have 29 years service and can't decide wheather to come out as on the new 2015 pension you can only get a 25% maximum lump sum on retirement.

I worked it out that if I did come out of the pension scheme and after all deductions I would only have £156 pcm to go into a ISA. over 30 years at £156pcm it will only get me £20k interest which is clearly not enough and this will be my only money and the state pension if it exists then.


Is there any scheme where I can put my money into a savings/ISA or similar before the tax man gets it. I've looked at prvate pension but not very vialble to my eyes.

Many thanks in advance.

They are currently putting in plans from 2015 that will move everyone onto a 13.9% which will mean £363 on my wages will go into this pension pot.

That is nothing. You are getting far more valuable benefits plus death in service, ill retirement and etc.

I paid £312 per month which is a considerable percentage [25%] of my income into my personal pension scheme with no other benefits like death in service or ill retirement and I have to rely entirely on how the market is doing for next thirty odd years. I might get much lower annuity because for one reason or higher annuity for another reason. I just do not know. Hell, it may not even be enough to live on by the time I am reaching the sixties.

You on the other hand, know exactly what you are getting by the time you retire. After all, it is defined benefit which the fire service pension and indirectly government will be paying you. So really, just keep paying! The cost of opting out is much much more costly. So comparing defined benefit pension and defined contribution pension is like comparing £200,000 new red car compared to the second hand Golf. That is how different they are.

Cheers,
Joe

opinions4u

Stay in.

While you might resent the changes you are still getting better value out of the scheme than the overwhelming majority of people contributing to a pension in the private sector.

atush

Stay in, even with the higher contributions it is better than you can do elsewhere.

but do save in ISas alongside, as this can help you retire early. This will at least save you tax on income/capital gains in the long term.

LittleJo

Hi
i have this odd theory that people I ask to defend/protect/care for me should be looked after in the same manner as that other fine body that does the same..... MPs
Jo

chewmylegoff

LittleJo wrote: »

Hi
i have this odd theory that people I ask to defend/protect/care for me should be looked after in the same manner as that other fine body that does the same..... MPs
Jo

Well the MPs pension scheme isn't too different in terms of % contribution from the 'employee'. Most MPs contribute nearly 14% towards a career average scheme which uses CPI to calculate inflation. So basically sounds like more or less the same sort of scheme?

MrTyo

I could be wrong on this chewmylegoff (please dont if i am!) but isnt that the recent contribution, they were paying alot lower before, and i believe its the "employer" contributions most people are worried about. I believe that their pension scheme is still alot better than all the other civil services that they have recently been clamping down on, anyhow lets not open that can of worms!

In regards to the OP, stick with your pension, if you find the sudden increase too high i would look at doing a better budget, and when you finally get the % salary increase when the freeze is over, dont plan to spend it too quick! since i have joined this board and been nagged by TYO my money spending has dropped after doing decent budgeting. Along with my own pension i contribut too i am starting my own stocks and shares isa to help bump it up (still learning on that one!)

I for one don't begrude people that are willing to run in and save me in a burning buiding (or enter your service of choice, police, army, nurses etc), so keep up the good work and make the most out of your pension!