Should i opt out of the Civil Service pension scheme?

atush

silver918 wrote: »

I am in the Alpha scheme, I have had serious thoughts about leaving as i will pay more money in than i will receive.

You could not be more wrong about this

GunJack

atush wrote: »

You could not be more wrong about this

unless you die stupidly early......

dunstonh

GunJack wrote: »

unless you die stupidly early......

death grant?
spouse and dependents pension?

Stubod

.....choosing to opt out of a civil service pension..!!!!


..and here's me thinking that you must have some basic intelligence to work for the civil service in the first place..

ArchaeoNeo

Judging by your monthly contribution and length of service it sounds like you're an HEO on the Fast Stream graduate programme, possibly not long out of uni and a bit green re pensions, so perhaps we ought to cut you a break. The recruitment & vetting process for all Civil Servants is stringent, even more so for Fast Stream so your intelligence is not in question.

The Alpha scheme is the kind of pension that you simply don't see very often in the private sector because it is expensive to maintain and very generous as previous posters have mentioned. If you are young and in good health then Alpha is for you. In fact next April you should seriously consider buying extra; your older self with kiss your feet for it one day.

Good luck with your career.

GunJack

dunstonh wrote: »

death grant?
spouse and dependents pension?

It depends on who you mean as "you"....if meaning the pensioner, the statement's accurate. If you mean the pensioner and family (i.e. spouse, young kids), then maybe, yes

Silvertabby

I suspect this is yet another example of a classic newby mistake, asked and answered many times during my time in the LGPS.

Q. Why am I being charged £1,500 a year in pension contributions but will only get back £500 a year pension?

A. Because the £1,500 is a one-off payment, whereas the (index linked) annual pension is paid for life. Ignoring index linked increases, £500 x average life in retirement of 20 years = £10K.

Not a bad return for £1,500, is it OP? OP? OP? - hello, are you still there ?

AnotherJoe

Silvertabby wrote: »

I suspect this is yet another example of a classic newby mistake, asked and answered many times during my time in the LGPS.

Q. Why am I being charged £1,500 a year in pension contributions but will only get back £500 a year pension?

A. Because the £1,500 is a one-off payment, whereas the (index linked) annual pension is paid for life. Ignoring index linked increases, £500 x average life in retirement of 20 years = £10K.

Not a bad return for £1,500, is it OP? OP? OP? - hello, are you still there ?

And with inflation on top its probably £20k.

Someone here referred to the stringent vetting process. I wonder if this is the last, secret step? Duck out, and you get let go due to a basic issue with maths and common sense.

Or is this maybe why we get the misgovernment we do, where short term investments arent made even though long term the cost of not doing that is crippling>?

silver918

Silvertabby wrote: »

I suspect this is yet another example of a classic newby mistake, asked and answered many times during my time in the LGPS.

Q. Why am I being charged £1,500 a year in pension contributions but will only get back £500 a year pension?

A. Because the £1,500 is a one-off payment, whereas the (index linked) annual pension is paid for life. Ignoring index linked increases, £500 x average life in retirement of 20 years = £10K.

Not a bad return for £1,500, is it OP? OP? OP? - hello, are you still there ?

Yes this is what i was concerned about. I have paid more than £1000 for one year yet my pension is worth way less than that. So let's say according to your calculation my pension is worth £500 and i am expected to live for 20 years after retirement does that mean i will get £10k a year?

Linton

silver918 wrote: »

Yes this is what i was concerned about. I have paid more than £1000 for one year yet my pension is worth way less than that. So let's say according to your calculation my pension is worth £500 and i am expected to live for 20 years after retirement does that mean i will get £10k a year?

You say you paid £1500 this year for £500 of annual pension. So if you survive 20 years in retirement you will receive a total of 20X £500 = £10K.


Next year you pay another £1500 into your pension and receive another £500/year making a total now of £20K after 20 years retirement for which you paid £3K. So on this simple calculation you are getting more than 6 times back what you paid in.


However it is better than that because your £500 of pension that you bought this year increases every subsequent year as your pay increases. Also once the £500 is being paid it increases every year with inflation. So your arithmetic gain in £s is far more than 6 times.