Clueless on Pensions - Civil Service Alpha or Partnership?

CEliz

JoeCrystal wrote: »

The best pension scheme for you in term of value is CS Alpha. There is absolutely no contest. Yes, PER YEAR.

TheShape wrote: »

I can't just post Yes, but Yes!

p00hsticks wrote: »

On the Alpha scheme, your employer is promising to pay you a certain sum every year when you retire. That will cost them far more than your contribution, but it's not possible to say exactly how much they will need to put in to meet that commitment.

Thank you SO much everyone! I understand how frustrating this must be as I REALLY am CLUELESS!!! :rotfl: I really, really do so much appreciate your help.

SO to CLARIFY - If I stay in the Civil Service until I am 68 years old, just say I don't get a pay rise (which of course I will at some point) and I pay in £77 per month which is 4.6% (this is correct, yes? My maths is ALSO awful), then by the time I retire at 68 I will be paid £19+ PER YEAR? This is correct, yes?
Also, will this rise with inflation? As of course £19+ will be worth a lot less in 41 years?

CEliz

JoeCrystal wrote: »

If you want to aim for £19,259 by 68 with 41 years of contribution and assuming that Civil Service contribute 8%, then you will need to contribute £1653.42 or 98% of your salary per month personally. (It does results in £1,050,000 pension pot but it assume you want to buy an index-linked annuity)

Is this what most people are facing with standard pensions across the UK? Now I understand why the Civil Service is so excellent for pensions. The fact I am able to still be receiving £19+ per year when I retire means I am almost 100% sure I am never leaving!!
I imagine this means I will be earning more in retirement than my partner also.

JoeCrystal

CEliz wrote: »

Thank you SO much everyone! I understand how frustrating this must be as I REALLY am CLUELESS!!! :rotfl: I really, really do so much appreciate your help.

SO to CLARIFY - If I stay in the Civil Service until I am 68 years old, just say I don't get a pay rise (which of course I will at some point) and I pay in £77 per month which is 4.6% (this is correct, yes? My maths is ALSO awful), then by the time I retire at 68 I will be paid £19+ PER YEAR? This is correct, yes?
Also, will this rise with inflation? As of course £19+ will be worth a lot less in 41 years?

Basically yes, each block get adjusted according to inflation basically so the real term would be maintained. And of course, you still can get added pension up to £6,500 on top if you are willing to pay extra.

JoeCrystal

CEliz wrote: »

Is this what most people are facing with standard pensions across the UK? Now I understand why the Civil Service is so excellent for pensions. The fact I am able to still be receiving £19+ per year when I retire means I am almost 100% sure I am never leaving!!
I imagine this means I will be earning more in retirement than my partner also.

Oh I agreed, it is my intention to find a job in public sector (assuming DB pension schemes are still around then) later in my lifetime purely for retirement provision Most people who are not lucky enough to be in a defined benefit pension scheme are not saving enough for their retirement. I believe that the average combined employer/employee contribution rate in private sector in 2015 is 4%.

Having said that, just bear in mind the public pension schemes will get changed in the future and most likely, increasingly less generous over the course of 41 years.

Dazed_and_confused

CEliz

SO to CLARIFY - If I stay in the Civil Service until I am 68 years old, just say I don't get a pay rise (which of course I will at some point) and I pay in £77 per month which is 4.6% (this is correct, yes? My maths is ALSO awful), then by the time I retire at 68 I will be paid £19+ PER YEAR? This is correct, yes?
Also, will this rise with inflation? As of course £19+ will be worth a lot less in 41 years?

You are missing one important thing here, although you have to pay £77.60/month on a salary of £20246 by paying this you will pay (on your level of salary) £15.50 less tax each month because the pension contribution will reduce your monthly pay, for tax purposes, from £1687.16 to £1609.55 hence less tax to pay.

So the real monthly cost is £62.10

The amount of pension entitlement you accrue each year will usually be increased by some form of inflation element however the amount may only be decided on a year by year basis. Not sure about Civil Service/Alpha but some pension schemes send an annual statement showing what you have accrued and any inflation uplift.

Terron

JoeCrystal wrote: »

Having said that, just bear in mind the public pension schemes will get changed in the future and most likely, increasingly less generous over the course of 41 years.

But also remember that the people who make the rules bemefit from similar schems so are unlikely to make them bad, and even more unlikely to remove benefits already earned.

Terron

CEliz wrote: »

As this is the public sector with no real guarantee of regular pay rises let alone ever reaching £35,000

There is no guarantee of regular pay rises in the private sector, but I believe a few civil servants still have such a guarantee (largely abolished in 2015).

kidmugsy

This thread is a leg-pull.

TheShape

kidmugsy wrote: »

This thread is a leg-pull.

??????????

jamesperrett

kidmugsy wrote: »

This thread is a leg-pull.

When I was 27 I had no idea about my CS pension - I just saw a small amount deducted from my salary for what was called widows pension back in those days. It wasn't until I had an appointment with a financial advisor that I started to appreciate how good a deal it was. He went through my finances and, every time pensions were mentioned on his questionnaire he said 'we can ignore that as you're in one of the best schemes around'.

I've now taken early retirement but many of my colleagues in their 50's still had little idea of some of the aspects of their pension that could make a big difference to how much they received in retirement. Many of us also didn't understand the value of added pension contributions to avoid higher tax rates either. So there is still a huge amount of education needed about pensions.