Am I paying too much?

The_Professor_

I’m definitely paying 20%

Marcon

NoMore said:

Are you certain on those percentages and they are the right way round ? SHPS seems to be normally between 5 and 7 % employee contribution not 25%.

Are you also including a AVC into that percentage perhaps ?

It's an unusual scheme, because employers apparently decide how much of the cost the employee has to pay:

How much do I pay?

The Scheme Actuary reviews contribu on rates every three years and a total contribu on rate iscalculated.

Your employer decides what proportion of the total you will need to pay. Please contact the individual who deals with pension matters in your organistion for this information.

Contribtions are deducted from your gross pay (before any tax is deducted) by your employer. This is known as a Net Pay arrangement. If you do not pay income tax, you will be unable to bene t from this tax relief.

Dazed_and_C0nfused

Marcon said:

NoMore said:

Are you certain on those percentages and they are the right way round ? SHPS seems to be normally between 5 and 7 % employee contribution not 25%.

Are you also including a AVC into that percentage perhaps ?

It's an unusual scheme, because employers apparently decide how much of the cost the employee has to pay:

How much do I pay?

The Scheme Actuary reviews contribu on rates every three years and a total contribu on rate iscalculated.

Your employer decides what proportion of the total you will need to pay. Please contact the individual who deals with pension matters in your organistion for this information.

Contribtions are deducted from your gross pay (before any tax is deducted) by your employer. This is known as a Net Pay arrangement. If you do not pay income tax, you will be unable to bene t from this tax relief.

So not salary sacrifice.


Op is paying £6,000/ year pre tax saving so a likely net cost of £4,800.

In return they accrue a pension of £500.

Looks like inflation protection is limited to a maximum of 2.5% per year which is on the low side too.

Relatively expensive then in relation to a lot of other CARE schemes but unless the op is the next Warren Buffet it's still likely to be better than a DC option.  

The_Professor_

Thanks for the input guys

The_Professor_

Dazed_and_confused you are spot on.  I’m wondering would it be better value to move to the 1/80th scheme?

Dazed_and_C0nfused

The_Professor_ said:

Dazed_and_confused you are spot on.  I’m wondering would it be better value to move to the 1/80th scheme?

What would your current 20% change to?

But irrespective of that would you really want to limit your future pension income by 25%?