Is this worth it? Paying 19% of salary to get 1.1k in 30 years time?

chucknorris

justme111 wrote: »

Chucknorris, I read it as his TOTAL payment for pension is 8k and accrual 1.1. We do not know what part of the total payment and accrual are additional benefits - faster accrual and ERBO. It is the value of those parts that is unknown and questionable , not of the main scheme. Unless of course I have understood it wrong and he pays 8 k just for additional benefits which is unlikely on his salary .

I read it as that too, and assuming he hasn't misunderstood the details that will be it. He is questioning the overall value of what he is paying (not separate elements such as faster accrual):

FIRSTTIMER wrote: »

I am just wondering peoples thoughts on paying 19% into a civil service pension to gain this. It is costing me approx 8k per annum for this 1.1k annual accrual

He has not given enough information to calculate the value of faster accrual in isolation, and it any case it isn't what he was asking.

Terron

Silvertabby wrote: »

CPI + is only paid during the accrual stage (as part of the career average revaluation). The increase in deferment/retirement is just CPI. On the plus side, this is uncapped.

OK. I misunderstood.

justme111

chucknorris wrote: »

I read it as that too, and assuming he hasn't misunderstood the details that will be it. He is questioning the overall value of what he is paying (not separate elements such as faster accrual):



He has not given enough information to calculate the value of faster accrual in isolation, and it any case it isn't what he was asking.

So is not it a good idea to point to him that different components of his pension have different value and to ask him and others whether they calculated separately value of different components of that pension ?
Or is it better to just repeat the mantra :" NHS pension is great" ?

FIRSTTIMER

Thanks for all this info.

I pay 10.2% normal benefits, 2.2% for 3 Year By Out and 6.6% for Faster Accrual. That equates to approx 8k before tax for accrual rate of 1/45 to take at 65 and a value of 1.1k per year at this value.

chucknorris

justme111 wrote: »

So is not it a good idea to point to him that different components of his pension have different value and to ask him and others whether they calculated separately value of different components of that pension ?
Or is it better to just repeat the mantra :" NHS pension is great" ?

Who has an NHS pension? I don't and neither does the OP!

I simply responded to the OP's question, if you have an issue with his question, I suggest that you take it up with him.

But we (my wife and I, who only come from normal professional backgrounds, I'm a chartered surveyor/university lecturer and she is a retired actuary, and we started with nothing ) have managed to accumulate over £6m from our investments, so I don't think that there is an issue with our ability to identify value in potential investments.

You obviously just want to be petty and argue, so please just go away and be a nuisance to someone else.

justme111

Apologies , TPS.
Is faster accrual at its maximum that you paying mean you will get 6 more years value of pension? If so it looks like you pay roughly 1% per additional year of faster accrual. Which is about half of the value of main years- or even less: if you pay about 10% and live till 87 let's say you receive 20 years of pension. So each year costs you 0.5% of your income. If you live longer it costs even less. Or is it less than 6 years? You may want to put numbers into compound interest calculator and compare what you get with an average performance of investments- with proviso that it is not guaranteed of course but you should have access to it 10 years sooner..
I would bet on you wanting to retire well ahead of 65 years which ERBO would allow you to so you may want to plan accordingly.

FIRSTTIMER

Thanks for this