Police pension- should i over pay?

happymum37

Hello all.

After having a career sabbatical I have returned to the police service after5 years off. Prior to that I had only 6 years in the job. All part time. 

I'm back again part time on 50% hours. 
I'm 40 years old so have realistically 20 years left and imagine staying part time or maximum going up to 75% for the last 10 years maybe.

I'm in the police pension but after such short service and then the unplanned sabbatical my pension forecast is dire.

We have a house currently worth £350k and a mortgage of 42k / 8 years on it. 

After getting a bit of urgent building work done we will have 30k cash savings. Not invested anywhere but premium bonds and a further 10k in jewelry I inherited.  
We would happily tie up 20k leaving us with 10k emergency new car fund

I have been over paying the mortgage furiously but now want to think about my pension as 20 years seems not a long time.

I can over pay my police pension but from what I can see that doesn't seem to be sensible as it's a career average and they don't match what I put in. 

I have £200 at the moment spare and wondered what you can advise.

My hubby has a aviva workplace pension. He pays 7% and I think they pay 5%. He can increase his. 

I get child benefit.

Thank you in advance!!!
We have no isas/ investments . Please don't tell me off for that .

happymum37

Ps as I'm not 40 till next month I could get a LISA still

QrizB

I know nothing about the police pension and will leave it to others to say whether paying extra is worth it.

If your goal is to retire at 60, do you know your "number" - the level of annual income you'll need to maintain the lifestyle you're hoping for? This is going to let you work out what size pension(s) you need, then you can compare those to your current projections and decide what changes tyou need to make to close any gap.

I overpaid my mortgage and was mortgage-free last year. In hindsight I'd have been better off putting the money into a SSISA. If you haven't considered this, you might like to think about it.

happymum37

QrizB said:

I know nothing about the police pension and will leave it to others to say whether paying extra is worth it.

If your goal is to retire at 60, do you know your "number" - the level of annual income you'll need to maintain the lifestyle you're hoping for? This is going to let you work out what size pension(s) you need, then you can compare those to your current projections and decide what changes tyou need to make to close any gap.

I overpaid my mortgage and was mortgage-free last year. In hindsight I'd have been better off putting the money into a SSISA. If you haven't considered this, you might like to think about it.

Thank you. 

I have no idea what our number would be 😐 

We have small children at the moment and can't see past that! 

I will look at our outgoings and make a list. 

 Current retirement dreams at at 60 for me as hubby is 5 years older and don't want to wait till he's much older to enjoy life.  If I had to get a small job to help us tick over I would but ideally not.

Bimbly

You joined the police force in 2011? (6 years + 5 five years)

So you joined the 2006 police pension?

After your five year break you are allowed to continue contributing to this pension? (If not, what pension are you now paying in?)

A quick read suggests you could buy extra years. This is usually good value, but I'm not familiar with the police pension.

The answers to the above questions will help someone who knows the police pension system to answer you. There are several incarnations of the police pension and it will depend which one you're in. You should have this information in the documentation sent to you/online.

hollie.weimeraner

https://mcauleyfinancial.co.uk/ are financial advisors that attend retirement seminars for the Police.  I had one with them in 2009 and retired in 2010 and invested in a SSISA that has performed really well in the time I've been retired.  Rather than rely on advice on here I would suggest you speak with an IFA who will provide you with (hopefully) better advice than on here. Personally if it was me I would overpay my mortgage but I'm not an IFA.

AlanP_2

Personally I wouldn't go anywhere near an IFA at this stage (and never to an FA).

I'm not familiar with the Police scheme but there will be someone on here who is and can start to highlight some of the options you have within the scheme.

The other obvious options are S&S ISA, personal pension and LISA but scheme options may be preferable.

Open the LISA, even if only with £10. You may never use it but once past 40 the option has disappeared forever.

hyubh

Everyone will be moved to the 2015 scheme from this April, so even if you have kept 2006 scheme membership, that will soon become academic going forward. 

In terms of making additional contributions to the PPS 2015, you have two options. The first to make them in order to reduce the usual actuarial reduction for retiring early; the second is to purchase additional pension. The additional pension is added to your regular CARE pension, but is not salary related. The 'cost' compared to regular accrual is indeed a lot higher due to the lack of an employer contribution, however that doesn't make it bad value, DB benefits are just genuinely expensive to fund.

Personally, I'd be sceptical spending money with an IFA for anything purely DB. In the first instance I'd ask the scheme administrator if you have questions, and in particular, to get a quote of what additional pension you will buy with the additional contributions you can afford to make.