Civil Service transfer-in - no brainer?

NedS

MX5huggy said:

I would (and did, although a smaller value and in to LGPS) take the offer. You don’t get the chance to do it at another time. And buying extra later seems very expensive. From another thread on here today:- 

I make additional payments into an old Premium pension (£265 pm: total payments of £3180 last year bought me an additional pension of £123 per annum).

You know exactly what you are getting for the money. The inflation protection is unlimited but CPI not the better RPI. 

you can then build up separate DC pot again 

The cost of purchasing additional DB pension is age specific and gets more expensive the older (and closer to retirement) you get. The OP is 29 so the cost would be a lot less as they have a lot longer to wait before they are able to access their pension.

ussdave

hugheskevi said:

I'm not sure if the CS pension offers a linked AVC + DB in terms of calculating lump sum (I think it does but I'm not an expert) so if that's an option it can be very advantageous to build up a separate lump sum.  I'd stop paying into your LISA and pay into AVCs in this case.

It doesn't.

Ah, that's a shame.

michaels

I am planning on spending 250k of DC to buy about 20k nominal of Alpha DB so I obviously think it is a good deal

gtat

Grabs39 said:

Afternoon,

At the start of the year I took a job in the CS, having never worked in the public sector.  The pension (and improved work-life balance) being one of the main reasons.

I have a rough understanding of how the pension scheme works, and requested information about transferring in.  I'll try to give a full picture of our finances

About me -
29
Salary 21,800 + non-pensionable overtime of around £1500/year
Homeowner with no plans to move before retirement age
Mortgage of around £165k on a house now worth around £200k.
Paying a small amount into a LISA each month - £30, with a view to increase this every year to top up retirement money

Wife-
30
Salary around £40k but will go down to about £38k at end of secondment
6 years in the Teachers Pension Scheme

Baby due in October

No debt other than the mortgage - credit cards are paid off in full every month.

Ideally we'd like to retire at 60 with over £3000/month (in todays money).  I appreciate the glaring hole in the plan is funding ages 60-68 which is something we'll have to address when we aren't staring down the barrel end of £12k a year in nursery fees!  Hopefully we will be able to take some of the pension earlier as our DB schemes should pay for more than we need if we stay in the public sector.

We overpay the mortgage regularly (not everyone's cup of tea on these boards, I know) and have emergency savings of around £10k in premium bonds and instant saver accounts.

So my transfer estimate is as follows -
£20,269 in old scheme.
I can have £2663 a year from age 68 with a widow's pension of £998

Unless I'm missing something obvious this means if I live to 75ish then I'm quids in.  Even if I don't, if my wife outlives me it'll still probably be worth it.


Does all of the above seem right and realistic, or have I missed something? (And sorry this post is much longer than I'd intended!)  

If you want a guaranteed income, then it looks like a good deal. However, be aware that State Pension Age will likely be later than 68 by the time you retire, and the age of accessing your Civil Service pension is tied to SPA.

Best wishes for the baby later this year. Ours is now 15 months - he is expensive ready 😁 Nursery fees, check out the Government tax free childcare scheme. You pay in to a Government account and they top it up by 20%, so that will bring down your expected £12k costs if you hadn't already factored it in.

Grabs39

Thanks all,

It looks like I'll do this transfer in, but then look at investing more outside the DB schemes in the future.  

Best wishes for the baby later this year. Ours is now 15 months - he is expensive ready 😁 Nursery fees, check out the Government tax free childcare scheme. You pay in to a Government account and they top it up by 20%, so that will bring down your expected £12k costs if you hadn't already factored it in.

Yeah, we've had a look.  The full time fees are about £1250/month, but we'll get 20% off most of that.  I'm looking at going to 4-day weeks too, so then we'll save an extra day.