Should i opt out of the Civil Service pension scheme?

darkidoe

DairyQueen wrote: »

I am just trying to think of a more stupid financial decision than opting-out of a public sector pension.
:think:
Nope, think this one even beats the 'invest whole pension pot in Bitcoin' suggestion.
:wall:

Pensions are very poorly understood on average but it is a pretty dry topic as well with too much technical details.

Pollycat

darkidoe wrote: »

Pensions are very poorly understood on average but it is a pretty dry topic as well with too much technical details.

But a very important topic and well worth making the effort to understand your options.

Camster

The OP sounds a little like a friend of mine. I recently tried to explain the benefit of paying voluntary NI contributions to boost their state pension.

Their only point was that "why should I pay £700 odd pounds if I only get £240 odd in extra pension"

It took a while to get through to them that the additional pension was for the rest of their life for the one off payment of the £700.

silver918

marlot wrote: »

Alpha is payable at state pension age - so currently 68 for young folk joining it today.


For an additional monthly payment, Alpha's retirement age can be brought forward by up to three years.

Do you know by how much extra i would have to pay to bring it forward a few years? I am not really looking to work beyond age 55.

hugheskevi

silver918 wrote: »

Do you know by how much extra i would have to pay to bring it forward a few years? I am not really looking to work beyond age 55.

There is an EPA estimator available at https://www.civilservicepensionscheme.org.uk/members/member-calculators/. It will probably be about 2% of salary to reduce your Normal Pension age by 3 years (currently, that is from age 68 to age 65).

I'd observe that you have gone from thinking about opting out of the scheme to considering voluntarily contributing more. These are at polar ends of the spectrum, and plans that oscillate between extremes usually indicate that the plan may benefit from a little more thought.

p00hsticks

silver918 wrote: »

Do you know by how much extra i would have to pay to bring it forward a few years? I am not really looking to work beyond age 55.

There are other ways of building up reserves to fund a gap between retiring early and drawing a company / state pension that you might want to consider such as investing in some sort of ISA or SIPP

dunstonh

Do you know by how much extra i would have to pay to bring it forward a few years? I am not really looking to work beyond age 55.

Normally you would fund the gap from 55 to scheme retirement age using a combination of S&S ISA and pension.

silver918

hugheskevi wrote: »

There is an EPA estimator available at . It will probably be about 2% of salary to reduce your Normal Pension age by 3 years (currently, that is from age 68 to age 65).

I'd observe that you have gone from thinking about opting out of the scheme to considering voluntarily contributing more. These are at polar ends of the spectrum, and plans that oscillate between extremes usually indicate that the plan may benefit from a little more thought.

Well everyone seems to think it's foolish to opt out so i don't think i'll be doing that. What would you do if you were in my shoes?

jamesperrett

As Dunstonh says, you need to look at a combination of ISA's and additional pension. The minimum age that you can take a pension will probably increase from 55 to 57 or 58 by the time you are thinking about retiring so you'll need the ISA to fund the period between 55 and minimum pension age. You'll need a private pension to fund the period between the minimum retirement age and the age at which you can take your civil service pension (unless you accept an actuarial reduction).

Pollycat

silver918 wrote: »

Well everyone seems to think it's foolish to opt out so i don't think i'll be doing that. What would you do if you were in my shoes?

I'd be reading the very good replies you've already had on this thread and then start to educate myself about the pension scheme you've had the good luck to be part of.