Civil service pension or private pension

Harrybrown100121

I been working in the civil service for 5 years, I am now looking to buy a house. My civil service wage is not very high and in order to afford a house, I would probably have to leave. Also the fact that the government wants to get rid of alot of civil service jobs, will reduce opportunities. Are private sector pension anywhere as good as civil service? or should I just rent for the rest of the my life but get a good pension at the end. 

dunstonh

Are private sector pension anywhere as good as civil service?

The vast majority are nowhere near as valuable.

or should I just rent for the rest of the my life but get a good pension at the end. 

You have one life and you need to do what is best for you.    A lot of people rent all their life and are happy.  Others are happy owning their own property.    Think about your priorities and forward plan comparing the various employment options.

hugheskevi

Harrybrown100121 said:

Are private sector pension anywhere as good as civil service?

With the odd very rare exception, not even close. Although, the Civil Service pension is much better for older employees than for younger employees (but still very good for younger employees, and astonishingly good for older workers).

or should I just rent for the rest of the my life but get a good pension at the end. 

That is taking a bit of an extreme 'all-or-nothing' approach. To develop a career, moving between sectors and employers is usually beneficial, especially early in career to build up a range of skills and experience. At a younger age it is more important to invest in and develop your human capital which will produce far more reward over time. It also doesn't have to be one thing or another forever, so I'd be focusing far more on the short to medium term than the long-term.

Emmia

Have you explored options to earn more in the CS - level transfer to higher paying departments, promotion etc? 

JoeCrystal

Harrybrown100121 said:

 Are private sector pension anywhere as good as civil service?

The minimum you can expect from your employer is 3% above £520 so a person on £30k can only expect £59.40 per month from your employer into your pension fund with you contributing 5% gross at £99 per month. Someone on the minimum wage like £18k will only get £29.50 per month from their employer for example. That is the very minimum legally required, if you are lucky, you might find an employer willing to base it on whole income, even luckier if you find an employer willing to match it and extraordinary lucky to find an employer in the private sector who still have an open DB pension scheme.

The Civil Service Pension Scheme blows that out of the water with all other bells and whistles such as ill-health retirement and so on and extra purchases relating to it. It is generally considered that a public sector pension scheme is worth a third of your salary on top.

drummersdale

I am coming to the end of my working life with 40 and a half years of CS pension to take and in the current climate feel very grateful I have that to look forward to, so to speak. Many of my colleagues and in particular the younger ones are probably getting fed up of me telling them how lucky they are to have this - I am fortunate to have most of mine in Classic (all of it now if I choose due to the McCloud judgement) and given the purported parity in Public & Private sector salaries these days I’d say it was a no brainer to either sit tight for now or as someone suggested above perhaps seek out opportunities for promotion, which will obviously help with pension in the long term.  Good luck whatever decision you make.

Dazed_and_C0nfused

I am fortunate to have most of mine in Classic (all of it now if I choose due to the McCloud judgement)

If you haven't changed grade (upwards) in the remedy period have you looked at what Alpha would provide in actuarially reduced pension?

Alpha accrues pension at getting on for double the rate of Classic so if you have no pressing need for the extra lump sum it might be an option worth considering?

itchyfeet123

I'm in a similar position and have concluded that even a really good public (ish, in my case) sector pension won't pay my rent in retirement absent very unlikely changes to the housing market. 

Paying a mortgage on my current salary would be considerably less than my rent, but saving the deposit is the challenge.  So my plan is to trade off lower salary for higher pension for a couple of years, then reasses. Owning (outright) in retirement means the pension doesn't have to be as good, so the reassessment will probably come down to how much I'd enjoy specific jobs rather than pensions.

I strongly agree with the earlier poster who said it shouldn't be a one time, all-career choice. Moving between roles and sectors is normal. 

Albermarle

Harrybrown100121 said:

I been working in the civil service for 5 years, I am now looking to buy a house. My civil service wage is not very high and in order to afford a house, I would probably have to leave. Also the fact that the government wants to get rid of alot of civil service jobs, will reduce opportunities. Are private sector pension anywhere as good as civil service? or should I just rent for the rest of the my life but get a good pension at the end. 

As a very rough figure , you probably will need an uplift in salary of around 25% to compensate for losing the CS pension.
Unless the new employer has one of the better pension schemes and is adding significantly more than the legal minimum 3%, then maybe 20% uplift would be enough.
Ideally when you move jobs you also want a real increase in salary as well , so you should be looking for jobs where the salary is about a third ? more than you get now.
Appreciate that may be difficult, but good to have a target in mind, 

Harrybrown100121

so I am on 24000 and the job I am looking at is around 35000 to 40000. I get what you are saying about the civil service pension and how good it is but I can't afford to move out of my parent house without a career move. 

Emmia

Harrybrown100121 said:

so I am on 24000 and the job I am looking at is around 35000 to 40000. I get what you are saying about the civil service pension and how good it is but I can't afford to move out of my parent house without a career move. 

I think you have to make the choice that you'll be happy with, private sector job will potentially  pay more making buying / moving out easier, but the pension contribution will be lower - so you'll need to be putting away more yourself...

Staying in the CS means the pension will almost certainly be "sorted" but moving out / buying will be delayed until you get promoted... 

It's your choice ultimately, no right or wrong answer - I was pension focused when I was young (mid 20's), so became a CS, but I've also been promoted enough to have also now purchased a place with my OH (in my mid 30's)