Left Employment - pension contributions

hyubh

Joe_Cocaine wrote: »

It is a Local Government Pension Scheme

While not quite as good as Nuvos, certainly still worth it, especially if you are at the lower end (the CARE LGPS is deliberately weighted to be particularly good for lower paid people).

atush

YEp, absolute madness not to join it.

hyubh

atush wrote: »

so what is that?

An accrual rate of 1/43.5, if you prefer fractions

2.3% for every year?

At the end of each financial year, the pension accrued to the start of the year is increased by CPI, and 2.3% of the pensionable pay during the year then added to it.

hugheskevi

I am aware (mainly in part due to this great forum) that the pension contributions from the Employer add up greatly, and are very valuable, however I am not able to touch this money for close to 40 odd years, (if the age does not increase in that time).

You can touch it at minimum pension age, which is currently 55 but depending on how the planned increase is legislated for may increase to 58 for you (and probably higher in future depending on how State Pension age changes). So probably more like 30 years.

so what is that? 2.3% for every year? So that times 3?

From the contribution rate given, the OPs salary should be around £16,000 so that is roughly £16,000*2.32%*3=£1,111 payable from age 65.

Employers contribution is 26% of gross salary.

If the OP is earning around £16,000 the employer contribution rate is 16.7%

Say you had contributions of 1K in a pension, and 500 came from your employer (yours wil have been much higher).

OP will have contributed member contributions of about £2,100 over the 3 years, and the value of that £1,111 p/a is going to have a Cash Equivalent Transfer Value (CETV) of about £6,500 (using archived calculator at this webpage). So that is an Exchequer contribution of about £4,500 (the employer contribution is much more, but that doesn't accurately reflect the value of the benefits accrued).

Otherwise be happy you are way ahead of most others your age.

Unless the OP has other pension provision, I'd hope a pension with a value of £6,500 is not way ahead of most 27 year olds. Although given the dire state of pension provision in general I suspect the median pension wealth of 27 year olds may well be zero

chiefie

PeacefulWaters wrote: »

In which case you sign up, pay up and reap the benefits when you're older.

If cash is tight, economise elsewhere. That pension has huge long term value.

Don't opt out of the LGPS. They are putting in anywhere up to 18% contributions (albeit some to meet a funding gap)

Bite the bullet and forget you are paying it in.

I paid in a DB pension from the age of 22 to 38. That alone will be worth £16,000 pa at 65. Thank god for those schemes , there arent many left.

Good luck:beer:

xylophone

Time to do some reading about your pension benefits....http://www.lgps2014.org/

Drebin911

Good Afternoon All

Just a quick message to say thanks to everyone who contributed this thread.

Some really sound advice, and once again - Cheers.

All the best

J

x

atush

Good luck in the new job