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How stupid is my plan?
Puddylove
Posts: 507 Forumite
Hi
I work FT for a Uni and pay into a USS pension. I'm happy with that part, esp. as it is a final salary scheme.
I also work PT for the same Uni, and have been paying additional payments to USS. The trouble is, it buys me time, doesn't add to my final salary, and when I retire FT I will have to retire PT too (which I wouldn't want to).
How crazy would it be to withdraw from the PT part, and save into an ISA instead? I would start paying £100pm, and when I go up a salary band (every Oct) would pay the increase (about £60) into it.
I know I get tax relief, and the Uni pays too, but it worries me that they could change terms at any time - I'd feel more in control this way.
Ok, now tell me I'm stupid.
P x
ETA I'm at least 20yrs away from retiring.
I work FT for a Uni and pay into a USS pension. I'm happy with that part, esp. as it is a final salary scheme.
I also work PT for the same Uni, and have been paying additional payments to USS. The trouble is, it buys me time, doesn't add to my final salary, and when I retire FT I will have to retire PT too (which I wouldn't want to).
How crazy would it be to withdraw from the PT part, and save into an ISA instead? I would start paying £100pm, and when I go up a salary band (every Oct) would pay the increase (about £60) into it.
I know I get tax relief, and the Uni pays too, but it worries me that they could change terms at any time - I'd feel more in control this way.
Ok, now tell me I'm stupid.
P x
ETA I'm at least 20yrs away from retiring.
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Comments
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That would be a very foolish move. Although it doesn't add to your salary figures, it adds to the other important number in the equation, i.e. years of pensionable service.
Do not opt out.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
That would be a very foolish move. Although it doesn't add to your salary figures, it adds to the other important number in the equation, i.e. years of pensionable service.
Do not opt out.
I suppose I have three main concerns;
1. USS seem to have plans to change all pensions to average salary scheme, at higher contributions.
2. They seem unable/unwilling to give me statements showing me what effect my additional PT payments will have.
3. The enforced retirement from my PT role if I wish to claim my FT pension.0 -
Do you mean the PT element only increases your years' of service?
That could still work to your advantage as it would mean that you'll reach the maximum (usually 40) years of service earlier. After this, you could then enquire about paying into the Additional Voluntary Contribution (AVC) part of the scheme."If you will change, everything will change for you." - Jim Rohn
I simply use these forums to share my knowledge, reinforce my learning and experience as an IFA. Please remember, if your circumstances are complex, speak with your local IFA from Unbiased or VouchedFor directories for regulated financial advice.0 -
I presume by "buying more time" you meant 'added-years' AVC? This should be shown on your main benefit statement. They won't normally issue a separate statement for this.
I think you may have confused yourself. There's no difference to your 'FT' or 'PT' pension. Even if you didn't work PT, you could still buy added-years by paying more.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
My PT contributions do buy more time - but aren't counted as Additional Voluntary Contributions. I earn about 1/3 of my income through contracts in this PT role, but it it not counted towards my salary.
If I go online, I only have access to my FT pension information; the PT bit is invisible.
I can request information, but it will take 8 weeks, apparently.0 -
My PT contributions do buy more time - but aren't counted as Additional Voluntary Contributions. I earn about 1/3 of my income through contracts in this PT role, but it it not counted towards my salary.
If I go online, I only have access to my FT pension information; the PT bit is invisible.
I can request information, but it will take 8 weeks, apparently.
Best to request the statement and wait. Maybe it will all become clear.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
How stupid is my plan?
About as bad as it could be.How crazy would it be to withdraw from the PT part, and save into an ISA instead? I would start paying £100pm, and when I go up a salary band (every Oct) would pay the increase (about £60) into it.
Completely off your rocks. A really bad financial mistake.
You would have to pay in around £1000pm into the ISA to get similar levels of what they pension would provide.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
About as bad as it could be.
Completely off your rocks. A really bad financial mistake.
You would have to pay in around £1000pm into the ISA to get similar levels of what they pension would provide.
I am only talking about the PT part...which can vary down to zero depending on student numbers, not my FT one.
Can you give me a rough idea of your workings for that?0 -
So the "PT" bit is buying extra years in the USS and the membership in the USS is based on the FT earnings?
Under these circumstances the extra years purchased will not increase your pensionable salary but they will increase your qualifying years? So this will be an increase in you pension when it is claimed, all inflation proofed? And you are asking whether you should keep on buying the additional years?
Unless you reach, or will reach, the maximum qualifying years (I assume there is a maximum?) then keep on paying. If you will hit any maximum you stop the additional purchase because you don't want to leave the main scheme and lose the death benefits etc.
Although, generally, you can't separate the claiming of the two "halves" of this you can always terminate the main employment, claim the pension (increased by the extra purchased) and still continue in the PT employment but pay no more contributions from the PT employment.
Simple? The way it "always" works?0
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