Private Sector vs Civil Service

ag0005

Hi

I’m a working woman currently working for private company with the current salary of £55k with private health insurance but without any pension.  I have given interviews and holds 2 offers now. First one is a role in the UK civil service Grade 7 and the pay is £50k basic + £3K allowance with the civil service alpha pension scheme. I have to pay 5.5% and govt will pay 27.1%. The other offer I hold is from a private firm for which the pay is £70k basic + £6600 Cash or benefits + up=to 10% bonus + private health insurance + 5% pension. This role will be permanent work from home. I am not able to decide if it's worth leaving a Civil Service job for a high paying job. I feel if I accept Civil Service job, I am accepting an offer less than my current salary and leaving another offer which is paying more than 1.5 times. Can anyone on this forum please help me to suggest what are the pros and cons of both the options. I know Civil Service pension scheme is quite good but not sure if I will stay back in UK when I retire as I am not a British national and may move back to my home country after 5-10 years. Other thing to consider here is we are going to start family planning after switching my job so I would prefer having good work life balance to give enough time to my baby.

Please share your thoughts on the above scenario and suggest what would be the best choice here. Thank you

MalMonroe

Wow, that made me feel exhausted! 

If it were me and I knew I was planning a family I'd go for the higher paid job now. Especially as you will be able to work from home. 

The reason I'd go for that one is that although you may be planning to return to work after your baby's born, that may not happen. You might decide you want to take more time off to be with your baby. (That happened to me.) If you take the higher paid job you will have the opportunity to save more before the baby arrives. 

You are aware that you don't have to rely on employers to pay into pensions for you, though, aren't you? You can pay into private pensions yourself and build up a healthy pension pot.

If you move back to your home country, though and you are not a UK national, will you be able to take any pension you have with you? I don't know but that's something you'll need to check.

One other thing to consider is - where do you think you will be most happy? There's more to life, although it's very helpful, than money and kudos. What does your partner think? Hopefully they will be involved in your plans.

MovingForwards

Your current employer should be offering a pension, it's the law. Did you opt out?

Any pensions accumulated while working in the UK will be available to you upon reaching UK state retirement age or sooner as per their terms.

When deciding between jobs it's easier to write a full list of pros and cons. Job spec, hours, wages, perks, prospects then see which one meets what you're looking for.

ag0005

MalMonroe said:

Wow, that made me feel exhausted! 

If it were me and I knew I was planning a family I'd go for the higher paid job now. Especially as you will be able to work from home. 

The reason I'd go for that one is that although you may be planning to return to work after your baby's born, that may not happen. You might decide you want to take more time off to be with your baby. (That happened to me.) If you take the higher paid job you will have the opportunity to save more before the baby arrives. 

You are aware that you don't have to rely on employers to pay into pensions for you, though, aren't you? You can pay into private pensions yourself and build up a healthy pension pot.

If you move back to your home country, though and you are not a UK national, will you be able to take any pension you have with you? I don't know but that's something you'll need to check.

One other thing to consider is - where do you think you will be most happy? There's more to life, although it's very helpful, than money and kudos. What does your partner think? Hopefully they will be involved in your plans.

Thanks for sharing your views.
My partner also supporting my decision. We are just exploring positive and negative of both the offers.

Points you have mentioned will help us for sure.

ag0005

MovingForwards said:

Your current employer should be offering a pension, it's the law. Did you opt out?

Any pensions accumulated while working in the UK will be available to you upon reaching UK state retirement age or sooner as per their terms.

When deciding between jobs it's easier to write a full list of pros and cons. Job spec, hours, wages, perks, prospects then see which one meets what you're looking for.

Yeah agree

Will make a check list and evaluate based on that..
thanks for the suggestion..

Savvy_Sue

MovingForwards said:

Your current employer should be offering a pension, it's the law. Did you opt out?

This. If you DID opt out, you are entitled to opt back in again. Your employer is REQUIRED to contribute (as long as you do!)

Dazed_and_C0nfused

First one is a role in the UK civil service Grade 7 and the pay is £50k basic + £3K allowance with the civil service alpha pension scheme. I have to pay 5.5% and govt will pay 27.1%.

That is really irrelevant as the alpha pension scheme is defined benefit scheme, not a defined contribution scheme so employer contributions have no material impact on your pension accrual.

Instead of building up a pension fund you are getting a guaranteed pension.  On the MSE pensions board alpha is generally seen as one of the best pension schemes available.

For example if you worked for a year earning £50k in pension earnings you would contribute £2,725 in pension contributions (an actual cost to you of probably just £2,180 after tax relief).

In return you will accrue a pension of £1,160.

Hard to think how you could get that sort of return from a DC scheme.

I’m a working woman currently working for private company with the current salary of £55k with private health insurance but without any pension

That is most unusual.  Irrespective of any auto-enrolment issues you are voluntarily paying more tax than you need to by not having a pension on that level of income.

ag0005

Savvy_Sue said:

MovingForwards said:

Your current employer should be offering a pension, it's the law. Did you opt out?

This. If you DID opt out, you are entitled to opt back in again. Your employer is REQUIRED to contribute (as long as you do!)

Yeah..
Thats my current employer and I might have opted out..

but at the moment the confusion I have is about my new job.. not able to take final decision..

pink_pirlie

If you are planning on having a baby, what does the private sector company pay in maternity benefits? Some civil service depts pay 9 months full pay. A lot of private companies pay only SMP. That could hav a huge bearing on the maths. 

That said, I would take the job that would make me happiest not that one that would bring in the most money. But that's what makes me tick. 

Only you can decide what's best for you. As others have said, draw up pros and cons based on your opinions and preferences and see where that takes you. 

I've just had to make a similar decision and it wasn't easy. 

Good luck 🤞

TBagpuss

If you want proper advice you need to talk to a specialist financial advisor with experience of pensions who would be able to advise you about what the pension is 'worth' - one way of looking at this is to look at what it would cost you to build a pension of similar value to the civil service one, by way of making contributions to a private pension or into whatever scheme your private sector employer offers. 


The salary fo the  private job is £15K p/a higher than the civil service one, so one way of looking at it would be to consider whether, if you were to pay that £15K difference into a pension, it would give you a pension equal to or better than the civil service pension.

and as others have said, also consider the other financial and non-financial benefits - what at the maternity benefits like? What sort of work life balance are you likely to be able to achieve in each case? How important is it to you to have private health insurance? How important to you is it to be able to WFH (bear in mind than in normal, non-covid time most employers will require that you have proper child care if you are working from home, so if you do have a baby you would still need to have child care even if you were WFH)

Marcon

Savvy_Sue said:

MovingForwards said:

Your current employer should be offering a pension, it's the law. Did you opt out?

This. If you DID opt out, you are entitled to opt back in again. Your employer is REQUIRED to contribute (as long as you do!)

...but not necessarily immediately. OP, you need to check with your employer.

ag0005 said:

First one is a role in the UK civil service Grade 7 and the pay is £50k basic + £3K allowance with the civil service alpha pension scheme. I have to pay 5.5% and govt will pay 27.1%. 

I know Civil Service pension scheme is quite good but not sure if I will stay back in UK when I retire as I am not a British national and may move back to my home country after 5-10 years. 

The government doesn't pay anything; it's the kindly old taxpayer who pays however much is needed to ensure members of the CS pension scheme get the benefits promised - and it could be a lot higher than an amount equal to 27.1% of your pay (a figure which is purely notional and designed to help civil servants grasp that this isn't 'quite good' but 'absolutely marvellous').

Instead of being purely driven by the finances, which actual job appeals to you the most?