Some people have no idea how lucky they are LGPS

billy2shots

My wife is a TA, barely breaking the personal tax allowance for salary but....

The LGPS is great as far as I can see. It's complicated mind you so I don't blame people for misunderstanding it. 

I've been paying into my DC Pension (stakeholder now SiPP) since 18 y/o, for 22 years now. It will never be as lucrative as public sector pension schemes. 

In my uneducated opinion, all public sector Pension schemes are good (not that many employed in that area fully appreciate it) but the LGPS seems particularly good. 

frugal90

I taught for just over 36 years. Pension is just under £23k. I was middle management. Also received a lump 3 X that, so feel happy with that. Worked very hard for it as well! Clever thing is I married a teacher and her pension if £20k, so between us we are quite comfortable. Of course it is now a care scheme, so less good, but still better than many.

Silvertabby

I'm retired now, but my job as a LGPS administrator included trying to pursuade people not to opt out of the scheme.  Sadly, I very rarely succeeded as by the time they rang me to request the opt out forms they had already spent their extra money.

Over the years, I heard many reasons for wanting to opt out, but the ones that still stick in my mind include:

My husband has a good pension, so I don't need one as well.

It's just another form of council tax, and if I don't need to pay it then I'm not.

Now that the State pension will be the same as my wages, I don't need this.  (After I explained what restoring the link between wages and the State pension really meant...) Well, the money is better off in my pocket than the council's.

The LGPS is a rip-off.  You are charging me £100 per month, but I can get a stakeholder pension for just £20 per month.

[Deleted User]

When I joined the NHS I was astounded at the lack of knowledge regarding pensions.
Barely anyone other than senior managers and consultants fully understood the system.
I would attend Unison meetings designed to help workers understand a little.
Remarkably, the hosts (Union and trust HR) had very limited knowledge of NHS pensions and even less knowledge of the wider pensions picture.

My lasting memory (I'm no longer with NHS) is how indifferent they were.
They did nothing to explain how generous the schemes are, or how difficult it would be to achieve the same level of pension in the private sector.
It's arguably best part of being NHS, seemed so strange that they didn't celebrate its benefits.
It was an impossible task to explain to colleagues that they had the equivalent of a half million plus pot or even persuade co-workers that a pension was infinitely better than putting £100 a month into an ISA.

p00hsticks

In my view it's why we've pretty much lost DB pensions in the private sector - employees didn't generally appreciate how much it cost the employer or correctly value the long term benefit to them. The preferred perks were things like company cars, christmas bonuses, and private medical insurance, and employers understandably switched resources to offer benefits other than good pensions that proved more effective in recruiting and retaining staff.

OldBeanz

billy2shots said:

My wife is a TA, barely breaking the personal tax allowance for salary but....

The LGPS is great as far as I can see. It's complicated mind you so I don't blame people for misunderstanding it. 

I've been paying into my DC Pension (stakeholder now SiPP) since 18 y/o, for 22 years now. It will never be as lucrative as public sector pension schemes. 

In my uneducated opinion, all public sector Pension schemes are good (not that many employed in that area fully appreciate it) but the LGPS seems particularly good. 

Hopefully she is (considering) paying all her taxable income into an AVC so that she can withdraw it all tax free when she retires.

OldBeanz

[Deleted User] said:

When I joined the NHS I was astounded at the lack of knowledge regarding pensions.
Barely anyone other than senior managers and consultants fully understood the system.
I would attend Unison meetings designed to help workers understand a little.
Remarkably, the hosts (Union and trust HR) had very limited knowledge of NHS pensions and even less knowledge of the wider pensions picture.

My lasting memory (I'm no longer with NHS) is how indifferent they were.
They did nothing to explain how generous the schemes are, or how difficult it would be to achieve the same level of pension in the private sector.
It's arguably best part of being NHS, seemed so strange that they didn't celebrate its benefits.
It was an impossible task to explain to colleagues that they had the equivalent of a half million plus pot or even persuade co-workers that a pension was infinitely better than putting £100 a month into an ISA.

But those people would likely have been a similar age to me when they started (civil service) when it would have been non-contributory. There didn't need to be a sales pitch. There was an option to not join presumably but I doubt anyone would have taken it, indeed I can remember folk opting to leave before they had done 4 years so they could cash in the pension for cash (don't think they will feel so clever now) .

daveyjp

It is nothing new.

Over 30 years ago I did a short stint in a Local Authority and even back then , when LGPS was truly gold plated, with final salary, 3x final salary lump sum, ability to retire at 55 etc etc people were still being tempted to stop contributing and set up a private pension on the back of a 'huge lump sum' on retirement.

Silvertabby

OldBeanz said:

[Deleted User] said:

When I joined the NHS I was astounded at the lack of knowledge regarding pensions.
Barely anyone other than senior managers and consultants fully understood the system.
I would attend Unison meetings designed to help workers understand a little.
Remarkably, the hosts (Union and trust HR) had very limited knowledge of NHS pensions and even less knowledge of the wider pensions picture.

My lasting memory (I'm no longer with NHS) is how indifferent they were.
They did nothing to explain how generous the schemes are, or how difficult it would be to achieve the same level of pension in the private sector.
It's arguably best part of being NHS, seemed so strange that they didn't celebrate its benefits.
It was an impossible task to explain to colleagues that they had the equivalent of a half million plus pot or even persuade co-workers that a pension was infinitely better than putting £100 a month into an ISA.

But those people would likely have been a similar age to me when they started (civil service) when it would have been non-contributory. There didn't need to be a sales pitch. There was an option to not join presumably but I doubt anyone would have taken it, indeed I can remember folk opting to leave before they had done 4 years so they could cash in the pension for cash (don't think they will feel so clever now) .

During the pensions mis-selling fiasco of the late 1980s private pensions sellers also targetted members of the Armed Forces, even though that scheme was also (notionally) non-contributory.

The way it was handled at my unit was that opters-out had to be interviewed by a series of HR personnel, so we could be sure that they knew what they were doing.  ie, pay clerk, who would explain the effect on their take home pay, then a Warrant Officer, then a junior officer, then a senior officer, who would witness their signature on the opt out forms.

Most fell at the first hurdle, on hearing that their take home pay would actually reduce, due to having to pay more NI.  Only a couple made it as far as the old school Warrant Officer.  The whole building heard their 'advice interviews' - "Don't be so effing stupid, get out of my effing office".  End of attempts to opt out of the AFPS, at least at my unit.

noclaf

I don't have any DB or Final salary pensions, would of been a nice-to-have but that's fine, will just have to focus on optimising my DC pensions.
As a number of us have observed, the lack of knowledge of pensions is quite significant though I think overall we are moving in the right direction as there is more accessible info now on YouTube for example though have to be careful to question everything you hear/see as not all of it is necessarily accurate or up to date.

I don't think any blame can be reasonably attributed on individuals for the lack of the pensions knowledge as the resources and lack of practical financial education has been poor historically....'you don't know what you don't know' and for many of us such as myself it was by sheer luck I found this forum and that sparked my interest to learn more both about investments and the basics of pensions. However what I do find astounding as well as unfortunate are the folks out there who spout utter garbage about pensions as if it's factual...case in point a conversation I overheard a few months back in the gym of all places 'I don't bother with pensions as I don't believe in them, it's all about property'.....the individual said it with such confidence and was 'advising' someone else and of course no context or any other relevant evidence to back their claims...you just hope that people question this kind of crap rather than assuming it must be accurate.