Any Civil Servants Out there using MY CSP?

Curls2208

Hi all,

I've decided to stop ignoring my pension scheme and actually look into it. The thing is, I have NO idea where to start. I'm hoping beyond hope that someone on this forum is on the same or a similar pension scheme to me and can advise me. Otherwise I'm lost as the pension website (MY CSP) is an absolute minefield of confusion.

So hopefully, as the civil service is quite big I'll find what I'm looking for.....I am currently on the ALPHA pension scheme. I pay 5.45 % or something like that of my pensionable pay, and my employer seems to pay 5 x that. 

It looks like this on my recent payslip 
Alpha 5.45 % 194.68
Employer Pension This Period 968.06 
I have gone on the my csp web pages, and I am finding it confusing. I was wondering if I could add my own sums (like an extra £100 pound a month) as I have heard of people doing this with their pension schemes and them getting it tax free. But I just don't know. 

I then read this  section 02B on this https://www.civilservicepensionscheme.org.uk/members/alpha-scheme-guide/     page (hopefully link will work) about an 'Added' Pension.

I was wondering if this is what I'm looking for? 

I also read that I could change my entire scheme from 'Alpha' to 'Partnership' https://www.civilservicepensionscheme.org.uk/members/defined-contributions/partnership-pension-account/thinking-of-joining-partnership-faqs/
but again, I have no idea if this would be beneficial or detrimental.

Again I know most of you won't have a clue, but I'm throwing a hook into a lake here, and hoping I'll catch someone who has the same or a similar civil service scheme to me. 

Curls2208

Here is the page for 'Added Pension' But again I can't tell if this takes tax into acocunt or not =-\

https://www.civilservicepensionscheme.org.uk/members/how-to-increase-your-pension/added-pension/

NedS

Assuming basic rate tax payer, if you were to contribute an extra £100/month from your salary to purchase added pension, you would reduce your gross taxable pay by £100 meaning you would receive £80 less in your net take home pay and would pay £20 less tax. So the £100 contribution has cost you £80. If you are a higher rate tax payer, then the tax savings are greater.

There is an added pension calculator on the MyCSP site that you can download and use to calculate how much added pension a contribution of £100/month (£1200pa) will buy for you. There are limits as to how much added pension you can purchase in total (around £7200 I believe, but you won't be getting anywhere near that with £100/month additional contributions)

Curls2208

Amazing. So I will do this. 
I will pay enough to take me below the high tax bracket, and this way I I am earning tax free. God that's clever. 

Another_Saver

Mycsp.co.uk is not a civil service pensions website, I honestly can't tell what they do.
civilservicepensionscheme . Org . Uk is (I'm unable to post links)
I'm a civil servant too, in Alpha.
I want to ask two things as it's not clear from your post:
1. Do you understand that alpha is a defined benefit scheme, and what that means? I.e. that the figure quoted on your benefit statement is a promise to pay you that much as an income when you reach state pension age, and that the amount is inflation-linked? This is as opposed to a defined contribution scheme where the figure quoted on your benefit statement is a pension pot, like a savings account that you try to build up until it's big enough to live off when you retire.
2. Have you signed up for an account on the civil service pensions website's pensions portal?
Partnership is a defined contribution scheme, generally most people on the forum would agree that you would either have to be very stupid, or be offered an amazingly good deal, to change to partnership.
You can add to your alpha pension by buying added pension, go to the members section of the website, then select "how to increase your pension" and select "buying added pension".
The way it works is you have to apply to do it before the new tax year starts (this year's deadline was 13 March, they haven't published next year's deadline yet but I would assume it is similar) and in your payslips from April 2021-March 2022 you will see additional pension contributions. It only works a year at a time so you have to re apply every year and you can't change your mind once the tax year you've applied to buy added pensions in has started.
As for whether or not it's worthwhile is debatable and depends on your circumstances. Generally, saving more for retirement if you can afford the savings is always worthwhile, and the biggest advantage of buying added civil service pension is you're buying extra inflation linked income for life, at better than commercially available annuity rates, guaranteed by the government. It is possible that putting that money into a SIPP could perform better over the course of your life, and some people like to have a DC pension pot alongside DB pension income - but it's not guaranteed and you have to learn at least a little about investing.
Consider contacting civil service pensions, pension wise, the pensions advisory service etc. to talk to someone about your options and specific circumstances in more detail.

Curls2208

THANK YOU, THAT IS SO HELPFUL

hugheskevi

Curls2208 said:

So hopefully, as the civil service is quite big I'll find what I'm looking for.....I am currently on the ALPHA pension scheme. I pay 5.45 % or something like that of my pensionable pay, and my employer seems to pay 5 x that.

When did you join the Civil Service? If it was before 31st March 2012 the position is more complicated, and you may well find that you are not on the alpha pension scheme as you think you are, due to the McCloud judgment.

Ignore anything about what your employer allegedly contributes - it is irrelevant to you, all that matters is what you pay and the benefits you receive in return for that payment. How the scheme chooses to value that benefit and divide up the cost between participating employers does not affect you.

I have gone on the my csp web pages, and I am finding it confusing. I was wondering if I could add my own sums (like an extra £100 pound a month) as I have heard of people doing this with their pension schemes and them getting it tax free. But I just don't know.

Yes you can. Section 2 of the alpha scheme guide details the options. You can contribute to Added Pension, EPA or a Defined Contribution AVC within the Civil Service pension scheme. You can also choose to contribute to an external personal pension if you wish. All of these options benefit from tax relief on contributions (it is awarded in different ways, but adds up to the same overall), and the benefits when drawn are taxable (aside from any pension commencement lump sum taken).

I also read that I could change my entire scheme from 'Alpha' to 'Partnership' https://www.civilservicepensionscheme.org.uk/members/defined-contributions/partnership-pension-account/thinking-of-joining-partnership-faqs/
but again, I have no idea if this would be beneficial or detrimental.

This is an option which few use, and is usually only desirable in the case that a member would otherwise opt-out due to not being able to afford contributions, for those who will work less than 2 years and for very high earners who incur tax charges due to the size of their pension accrual.

It is not a decision to be taken lightly, and you should learn considerably more about the pension scheme and pensions more generally before thinking about this.

There are limits as to how much added pension you can purchase in total (around £7200 I believe, but you won't be getting anywhere near that with £100/month additional contributions)

To clarify, the £7,200 limit refers to the maximum amount of annual Added Pension which can be purchased, and does not include any inflation increases from previous purchases.

That is likely to cost around £100,000 (the cost of Added Pension depends on age and would need to be spread over many years to avoid breaching the Annual Allowance.

It looks like this on my recent payslip 
Alpha 5.45 % 194.68

I will pay enough to take me below the high tax bracket, and this way I I am earning tax free. God that's clever. 

That contribution rate suggests a salary of £42,865 and a taxable income of £40,529. The higher rate threshold is £50,000 (assuming you live in England) so do you have at least £10,000 of taxable income aside from your salary?

The pension when received is taxable, so you are likely to pay basic rate tax on it.

Mycsp.co.uk is not a civil service pensions website, I honestly can't tell what they do.

MyCSP is a private company that have a contract to administrator the Civil Service Pension Scheme. The website above is the website of the private company. The Civil Service Pension Scheme is at this link.

2. Have you signed up for an account on the civil service pensions website's pensions portal?

Link to Pension Portal here.

The way it [Added Pension] works is you have to apply to do it before the new tax year starts (this year's deadline was 13 March, they haven't published next year's deadline yet but I would assume it is similar) and in your payslips from April 2021-March 2022 you will see additional pension contributions. It only works a year at a time so you have to re apply every year and you can't change your mind once the tax year you've applied to buy added pensions in has started.

You can also make one-off lump sum contributions.

Another_Saver

hugheskevi said:

Curls2208 said:

So hopefully, as the civil service is quite big I'll find what I'm looking for.....I am currently on the ALPHA pension scheme. I pay 5.45 % or something like that of my pensionable pay, and my employer seems to pay 5 x that.

When did you join the Civil Service? If it was before 31st March 2012 the position is more complicated, and you may well find that you are not on the alpha pension scheme as you think you are, due to .

Ignore anything about what your employer allegedly contributes - it is irrelevant to you, all that matters is what you pay and the benefits you receive in return for that payment. How the scheme chooses to value that benefit and divide up the cost between participating employers does not affect you.

I have gone on the my csp web pages, and I am finding it confusing. I was wondering if I could add my own sums (like an extra £100 pound a month) as I have heard of people doing this with their pension schemes and them getting it tax free. But I just don't know.

Yes you can. Section 2 of thedetails the options. You can contribute to Added Pension, EPA or a Defined Contribution AVC within the Civil Service pension scheme. You can also choose to contribute to an external personal pension if you wish. All of these options benefit from tax relief on contributions (it is awarded in different ways, but adds up to the same overall), and the benefits when drawn are taxable (aside from any pension commencement lump sum taken).

I also read that I could change my entire scheme from 'Alpha' to 'Partnership'
but again, I have no idea if this would be beneficial or detrimental.

This is an option which few use, and is usually only desirable in the case that a member would otherwise opt-out due to not being able to afford contributions, for those who will work less than 2 years and for very high earners who incur tax charges due to the size of their pension accrual.

It is not a decision to be taken lightly, and you should learn considerably more about the pension scheme and pensions more generally before thinking about this.

There are limits as to how much added pension you can purchase in total (around £7200 I believe, but you won't be getting anywhere near that with £100/month additional contributions)

To clarify, the £7,200 limit refers to the maximum amount of annual Added Pension which can be purchased, and does not include any inflation increases from previous purchases.

That is likely to cost around £100,000 (the cost of Added Pension depends on age and would need to be spread over many years to avoid breaching the Annual Allowance.

It looks like this on my recent payslip 
Alpha 5.45 % 194.68

I will pay enough to take me below the high tax bracket, and this way I I am earning tax free. God that's clever. 

That contribution rate suggests a salary of £42,865 and a taxable income of £40,529. The higher rate threshold is £50,000 (assuming you live in England) so do you have at least £10,000 of taxable income aside from your salary?

The pension when received is taxable, so you are likely to pay basic rate tax on it.

Mycsp.co.uk is not a civil service pensions website, I honestly can't tell what they do.

MyCSP is a private company that have a contract to administrator the Civil Service Pension Scheme. The website above is the website of the private company. The

2. Have you signed up for an account on the civil service pensions website's pensions portal?

The way it [Added Pension] works is you have to apply to do it before the new tax year starts (this year's deadline was 13 March, they haven't published next year's deadline yet but I would assume it is similar) and in your payslips from April 2021-March 2022 you will see additional pension contributions. It only works a year at a time so you have to re apply every year and you can't change your mind once the tax year you've applied to buy added pensions in has started.

You can also make one-off lump sum contributions.

This is what I would have written if I hadn't needed.to bath the dog today.

Curls2208

Thanks for all of your help. I think I'm getting there. About the wages, they vary every month. It's confusing. I don't know what's taxable and what's not.

my basic is 38k , I earn 4k shift pay, i earn about 5.5k cost of living allowance for working overseas (paid in pounds and registered to Uk address), I earn extra bits like 2K 'difficult location' allownce.

My total added together (ignoring tax) is about 52K. But Im unsure as to which bits are taxed.

hugheskevi

Curls2208 said:

About the wages, they vary every month. It's confusing. I don't know what's taxable and what's not.
my basic is 38k , I earn 4k shift pay, i earn about 5.5k cost of living allowance for working overseas (paid in pounds and registered to Uk address), I earn extra bits like 2K 'difficult location' allownce.
My total added together (ignoring tax) is about 52K. But Im unsure as to which bits are taxed.

Your payslips should show your cumulative taxable income to date, and your annual P60 will tell you your total taxable income for the year. Using your payslip you should be able to work out what is taxable and what isn't (add things up, and see what matches the monthly taxable income on the payslip).

However, even on just your basic £38K salary you pay £2,071 of pension contributions (which get tax relief), so it looks like you do not pay any higher rate tax given that altogether income adds up to £52K, from which at least £2K is deducted for pension contributions.

Curls2208

Good to know I'm not in the higher bracket! I am happy to pay tax , but at the same time, paying Boris to spend billions on excel spreadsheets feels like my money going to waste ;-)