Rough idea of my return?

[Deleted User]

Hi All

Thanks for all the replies. I've spoken to an FA and have some figures now to look at before I decide.
Now the question is; mortgage overpayment or APC?

Linton

Are you sure those numbers are correct? The LGPS number looks unreasonably low. Its about 1/3 what you would get simply by putting £100/month for 7 years into a private pension.

[Deleted User]

Hi Linton

Yes I think so, I've checked it again

Your_Hero

Missu wrote: »

Hi Linton

Yes I think so, I've checked it again

I suggest you re-check your figures or post them here. It's not the most user-friendly calculator by any measure.

Your Normal Pension Age (NPA) 66
Total extra pension to be bought £ 535.05
Years of agreement 7
Pension added to account each year of agreement £ 76.44
Gross total Regular cost of pension being bought £ 100.00
Regular Cost to employer £ 0.00
Regular Cost to member before tax relief £ 100.00

I just entered some details and it's close to your circumstances. Have you misread the "pension added to account each year of agreement"?

The total extra pension bought is £535 p.a.

[Deleted User]

Your_Hero wrote: »

I suggest you re-check your figures or post them here. It's not the most user-friendly calculator by any measure.

Your Normal Pension Age (NPA) 66
Total extra pension to be bought £ 535.05
Years of agreement 7
Pension added to account each year of agreement £ 76.44
Gross total Regular cost of pension being bought £ 100.00
Regular Cost to employer £ 0.00
Regular Cost to member before tax relief £ 100.00

I just entered some details and it's close to your circumstances. Have you misread the "pension added to account each year of agreement"?

The total extra pension bought is £535 p.a.

Thank you yes I had misunderstood!

[Deleted User]

Now that's clearer which option would seem best value?

Your_Hero

Missu wrote: »

Now that's clearer which option would seem best value?

The additional pension.

atush

If you are not retiring earlier than your scheme age, then extra pension. Put extra money into a DC pension.

If you want to retire before this, then every extra penny into a DC pension.

Linton

What is your number for Your Hero's £535?

Given that number we can do a simple calculation. I would expect the Pru to be offering you a 25% lump sum. If that is the case then the value of a Pru pension with no lump sum would be £380 X 4/3 = £507.

But I know nothing about LGPS and so dont know whether there are any differences in other aspects eg spouses pension, inflation indexing, flexibility as to when they can be taken. Assuming no differences, the best I can say is that it is marginal, neither is strikingly better than the other.

If the extra pensions are index linked they are very good value compared with what you could get on the open market with a private pension, if not they seem similar to me.

Your_Hero

Linton wrote: »

What is your number for Your Hero's £535?

Given that number we can do a simple calculation. I would expect the Pru to be offering you a 25% lump sum. If that is the case then the value of a Pru pension with no lump sum would be £380 X 4/3 = £507.

But I know nothing about LGPS and so dont know whether there are any differences in other aspects eg spouses pension, inflation indexing, flexibility as to when they can be taken. Assuming no differences, the best I can say is that it is marginal, neither is strikingly better than the other.

If the extra pensions are index linked they are very good value compared with what you could get on the open market with a private pension, if not they seem similar to me.

The additional pension would work out better, because it is index linked, and also comes with spouse's pension. (edit) Having a read again, and I'm not 100% sure on the death benefit. Perhaps someone more familiar with the LGPS 2014 could comment.

Also there is no investment risk as associated with the Pru AVC which is based on assumptions for growth, annuity rates etc. The additional pension provides a guaranteed income with the employer taking all the risk.

[Deleted User]

Thank you both. I hadn't considered the comparative safety if the additional pension . Food for thought