Some people have no idea how lucky they are LGPS

Silvertabby

noclaf said:

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.

That person was not alone in claiming that 'property is his pension'.

May work if he has a number of properties he can sell in order to live off the assets - but all too often it's said by someone who intends to just downsize in retirement, and live off the monies realised that way.

Then they reach retirement age and decide that they really love their home and don't want to move.  Or they realise that the difference in prices between their old and new homes isn't that great, especially after moving expenses have been accounted for.

noclaf

Silvertabby said:

That person was not alone in claiming that 'property is his pension'.

May work if he has a number of properties he can sell in order to live off the assets - but all too often it's said by someone who intends to just downsize in retirement, and live off the monies realised that way.

Then they reach retirement age and decide that they really love their home and don't want to move.  Or they realise that the difference in prices between their old and new homes isn't that great, especially after moving expenses have been accounted for.

Yep that's a good point, nothing against using property towards retirement and for those who can and did, good on thembut context is important as everyone's situation is different....full transparency If I owned multiple properties I would definitely use them towards my retirement whether it be using the rent or just selling up and redeploying the capital in investments....though not sure I would want to be a landlord in retirement given all the changes in taxation and other legal aspects...anyway that's for a different day and thread!

billy2shots

OldBeanz said:

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.

Could you take a minute to expand on that please. 
We currently have a decent pot (of already taxed money ) that we can use to live on. 

Happy to maximise (future) gains by contributing as much as is worth while into my wife's LGPS. 

Dazed_and_C0nfused

billy2shots said:

OldBeanz said:

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.

Could you take a minute to expand on that please. 
We currently have a decent pot (of already taxed money ) that we can use to live on. 

Happy to maximise (future) gains by contributing as much as is worth while into my wife's LGPS. 

Worth a read.

https://www.lgpsmember.org/your-pension/planning/paying-extra/#:~:text=If you take your AVC,benefits, including the AVC plan

HRH_MUngo

My LGPS payout is a couple of hundred pounds a month.  Not a lot....but I paid into it for less than ten years (not eligible before that).  

My husband paid into a Prudential AVC scheme with his Teachers Pension for a similar time.  He gets the princely sum of £35 a month from that!  (Obviously he has his TPS Pension too - another good one).

So yes, the LGPS is a very good one and I too cannot understand people who grizzle about it

duckson

My wifes CETV from the LGPS (she was a deffered member from being a TA for 5-6 yrs or so) is being paid into her Vanguard SIPP today, we thought the very low 5 figure amount was better than the ~£80pm (todays value) when she is 68yrs old it was quoting.

Andy_L

billy2shots said:

OldBeanz said:

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.

Could you take a minute to expand on that please. 
We currently have a decent pot (of already taxed money ) that we can use to live on. 

Happy to maximise (future) gains by contributing as much as is worth while into my wife's LGPS. 

Most DB pension schemes with an AVC require you to take an equal lump sum from both the DB pension & the AVC. The LGPS is unusual (unique?) in that it lets you take all the lump sum from just the AVC pot which means you can get a lump sum and avoid the poor commutation rate of £12 lump sum for sacrificing £1 of annual pension

leosayer

Andy_L said:

billy2shots said:

OldBeanz said:

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.

Could you take a minute to expand on that please. 
We currently have a decent pot (of already taxed money ) that we can use to live on. 

Happy to maximise (future) gains by contributing as much as is worth while into my wife's LGPS. 

Most DB pension schemes with an AVC require you to take an equal lump sum from both the DB pension & the AVC. The LGPS is unusual (unique?) in that it lets you take all the lump sum from just the AVC pot which means you can get a lump sum and avoid the poor commutation rate of £12 lump sum for sacrificing £1 of annual pension

Not unique to LGPS.

I work for a private sector firm that added this feature as part of a concession when they stopped further DB accruals about 10 years ago. It's very useful although hardly anybody understood the value of it.

OldBeanz

billy2shots said:

OldBeanz said:

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.

Could you take a minute to expand on that please. 
We currently have a decent pot (of already taxed money ) that we can use to live on. 

Happy to maximise (future) gains by contributing as much as is worth while into my wife's LGPS. 

The LGPS allows you to accumulate a lump sum by taking out an AVC which to take full advantage should be cashed-in at the same time as the main benefits. This is a net pay arrangement and you only really benefit by paying taxable income above the personal allowance. My wife used to give me, as a basic rate tax payer, her marriage allowance to decrease her personal allowance and increase her taxable income which she duly paid into an AVC. She will come out with a pension of circa £3500 which will allow her to accumulate circa £29k in her AVC - so tax free on the way in and tax free out. There is more detail than that to be explained but if you read Dazed_and_confused's link then we can clarify further.

SarahB16

Durban said:

I am fortunate to be in the LGPS and know how lucky I am. I have made the most of it and bought extra years and paying into the connected AVC for my lump sum. 

I also know how lucky I am to be in the LGPS scheme. 

I am looking for confirmation that my thinking for my circumstances is best please. 

When I reach retirement, I would prefer to have a larger annual pension rather than taking a large lump sum payment at retirement.  Therefore, am I correct in thinking it would be better for me to pay additional pension contributions/buy extra years and when I reach the maximum limit re additional pension contributions only then consider paying AVCs? 

I should add my employer does not contribute to either additional pension contributions nor AVCs.  

Thank you in advance for your help.