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CIVIL SERVICE PENSION - Added years help?

idgie27
Posts: 2 Newbie
Hi
I noticed the very helpful advice that you all gave Luis on her civil service pension lump sum issue and thought I would ask a question that has been bugging me for some time.
I hope to retire at 60 :T when I will have completed 40 years service. My partner is 5 years younger than me, also a civil servant and wants to retire when I do. In order to do this, she will only have completed 43.5 years and thus be 5.5 years short of a full pension.
We are both in the ‘classic’ pension scheme.
The question is, does she buy added years or does she invest in a non-civil service scheme. Or will the pension difference not be that significant that it is not worth her buying the xtra years?
I understand that the rules for buying added years changes next year but under the classic scheme she is still entitled to buy added year under the existing scheme. Does anyone know which scheme is better?
Many thanks for any views.
I27
I noticed the very helpful advice that you all gave Luis on her civil service pension lump sum issue and thought I would ask a question that has been bugging me for some time.
I hope to retire at 60 :T when I will have completed 40 years service. My partner is 5 years younger than me, also a civil servant and wants to retire when I do. In order to do this, she will only have completed 43.5 years and thus be 5.5 years short of a full pension.
We are both in the ‘classic’ pension scheme.
The question is, does she buy added years or does she invest in a non-civil service scheme. Or will the pension difference not be that significant that it is not worth her buying the xtra years?
I understand that the rules for buying added years changes next year but under the classic scheme she is still entitled to buy added year under the existing scheme. Does anyone know which scheme is better?
Many thanks for any views.
I27
0
Comments
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If your partenr wants to retire at 55 she will receive a reduction in pension (very roughly about 25%)
You cannot buy extra years if you would end up with more than 40 years service adding the extra years to the service she'd accrue assuming she stayed till 60 so (assuming there's a typo in the numbers you've posted) she'd be 5.5 years short of 40 years at age 55 so could only buy 0.5 of a year & thus can't buy any as you have to buy in full years.
To make up the shortfall she needs to save/invest buy some other method, be that pension (Stakeholder, personal or SIPP),AVCs, ISAs, property or international drug trafficing.
BTW as you're "partners" the classic pension will not provide a survivors pension.0 -
Hi
Thanks Andy. Yes it is a typooops! When I am 60, she will be 55. I will have completed my 40 years but she will have only suffered just under 35 years. Thus I assume she will have to add 5.5 years to be able to retire with a full pension at 55.
Not sure whether to buy added years, other investment and if we do go the added years route, is it better to start them now under the existing scheme or wait till next year under the new scheme.
Never really know what to do for the best when the Govt keeps changing the benifits. Same when they introduced the classic plus and premium. I assumed that the old one would be better so stuck with the Classic?
Thanks0 -
Hi
Thanks Andy. Yes it is a typooops! When I am 60, she will be 55. I will have completed my 40 years but she will have only suffered just under 35 years. Thus I assume she will have to add 5.5 years to be able to retire with a full pension at 55.
Main thing to remember is that if she retires at age 55, she will not get a full pension even if she has 40 years. As Andy says it will be actuarilly reduced by around 25% because she is retiring 5 years early.
So if her pension was £8,000 per year, she would only get £6,000.0 -
Hi
Never really know what to do for the best when the Govt keeps changing the benifits. Same when they introduced the classic plus and premium. I assumed that the old one would be better so stuck with the Classic?
Thanks
Nope, classic plus and premium are far better for the majority of people. Admittedly I did lose about 6 months or something by converting previous 'classic' years to 'premium', but as I have 31 years to go to retirement (groan) this was a small price to pay.
You should have been sent illustrations of the impact the different schemes would have on your pension when the new schemes were introduced.:A MSE's turbo-charged CurlyWurlyGirly:AThinks Naughty Things Too Much Clique Member No 3, 4 & 5
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Hi
Thanks Andy. Yes it is a typooops! When I am 60, she will be 55. I will have completed my 40 years but she will have only suffered just under 35 years. Thus I assume she will have to add 5.5 years to be able to retire with a full pension at 55.
Having reread my post it is a bit poorly worded:
If your OH was to work to the normal retirement age (ie 60 in her case) she would achieve the max allowed 40 years of pension. As a result she cannot buy added years.0 -
brazilianwax wrote: »Nope, classic plus and premium are far better for the majority of people.
Hmmm thats an "unconventional" view. The only people I know who were keen on it were some unmarried couples (both gay & straight) since they would get partner benefits. As for the rest of the improvements (60ths with 12:1 commutation vs 80ths + lump sum, higher death benefits & a few other tweaks) it was all very marginal considering it was officially cost neutral with the extra 2% contributions.
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