pension help

vsoe57

hi I have been paying in to a pension for nearly forty years that is the normal max time but I have An option to carry on paying into it but not for much gain in the long term any advice please thank you .

Wilkins

If you like doing things for not much gain, then carry on paying into it. If, on the other hand, you don't, then don't.

atush

What sort of pension?

Private? State? Final Salary? Money purchase?

vsoe57

Its a final salary pension

atush

Who do you work for? Can you pay AVCs instead?


if you will not build up future epnsion, then stop the contributions. You can contribute to a Personal pension and s&S isas instead. These will help you retire earlier than your scheme age if you want.

sleepless_saver

vsoe57 wrote: »

hi I have been paying in to a pension for nearly forty years that is the normal max time but I have An option to carry on paying into it but not for much gain in the long term any advice please thank you .

How much gain is "not much" and what would you have to pay for it?

hyubh

vsoe57 wrote: »

Its a final salary pension

I'm guessing here, but when a final salary scheme has a reckonable membership cap, still contributing will typically keep the life cover aspects going - i.e., things like death in service grants and ill health retirements. If you stop contributing and go deferred, then if you die, the scheme might pay out next to nothing (depends on how generous the rules are). Whether that's enough reason to still contribute is another matter however...

vsoe57

Ok paying around £81 per week pension and £82 into avc max into avc is £91 will gain about £1500 a year on pension if I continue to pay into pension thanks

kidmugsy

vsoe57 wrote: »

Ok paying around £81 per week pension and £82 into avc max into avc is £91 will gain about £1500 a year on pension if I continue to pay into pension thanks

It depends on time. If you pay £81 per week for a couple of years and then draw about £30 per week (index-linked?) for thirty years you'll have done very well out of it.

If you pay in the £81 for ten years and then draw the £30 for five, you've lost.

So: are there any objective reasons to expect to die young? If you do, will your widow get 50% of the £30 per week? How much longer do you expect to carry on paying the extra £81 for?

AlwaysLearnin

I assume you could be on a 2/3's final pension on a 1/60th accrual rate, hence the 40 year max. If so, before ceasing any payments just be certain that the 40 year max timescale is set in stone.

For example; my first DB pension was 2/3's on 1/50th, but when you read the rules it actually worked on years from joining the scheme to your Normal Retirment Date (NRD). This meant that if you joined at 21, with a NRD of 65, you would require the whole 44 years to get the full pension (i.e. the equivalent of 1/66th accrual rate - you only really got the 1/50th rate if you started contributions at 31 years and 8 months old, i.e. 33 years and 4 months from NRD).

As mentioned above too, if you do stop paying then it will probably be an idea to think about replacing any death in service cover you will lose as a result

vsoe57

Ok it seems I am in a protected pension and will not lose any life cover if I stop paying in after forty years service .