Can a "medium" public sector job achieve £500 DB within 5 years ?

RNV

r6mile said:

Not sure if this is helpful but I can give you my example. I am a current civil servant and have for 5 years been on the standard 'alpha' pension which is a career average scheme, at 2.32% for each year (1/43).

My gross salary over the last 5 years has increased from around £38k to around £60k. My current benefit projection is around £6k of pension per annum, at the State Pension retirement age. I know you can take alpha from age 55 but I imagine there will be some heavy discount on the benefits if so.

Lot of jobs in the civil service (and the wider public sector) that could accommodate a late entrant. And lots of flexibility, including to reduce your hours etc - which you may want to do as you get closer to retirement.

Thanks, such examples help.

May I comment that your example seem to be showing a different situation (vs a common narrative of stagnated  public sector salaries). Unless of course you achieved a significant promotion within 5 years; an increase of >50% in salary seems remarkable. 

In comparison, my salary remained unchanged for the last 5 years (lots of excuses of market downturn etc) with a 10% increase only a few month ago at "sudden" realisation by the employer of loosing employees for jobs elsewhere while already understaffed to support new big projects. 

RNV

michaels said:

Don't think any schemes with a final salary pension are still open to new entrants in the CS.

However although the standard accrual is 2.32% of annual pensionable salary you are allowed to purchase both additional pension and EPA (which brings forward the pension start date to 67).  This works on a new pay basis and at your age might cost 85-90k to purchase the maximim 7k pa extra pa (form age 67) so about 60% of that from age 57.

On the myCSP website there are links to a calculator that will tell you how much added pension will cost and the reduction tables that tell you how much you lose from taking the pension early - these should be 'actuarial fair' so the total amount you receive is the same whether you take it early or not (more years = less per year).

[I am a similar age and recently joined the CS at SEO (highest non-management grade) and transferred in some of my DC pension (about 240k of DC to purchase a DB of 19k pa from age 67) and am making added pension DB purchases of about £1500pa for £20k pa (similar to the sal sac I was doing before in the private sector but no employer or employee NI saving)]

Thanks, this DC/DB  transferring is a totally new concept I didn't know anything about. I will try to educate myself a bit more.  And as I said above will try to invest some time exploring CS job vacancies.

r6mile

Salary at the same grade yes is very flat. The only way for salary to go up is to get promoted unfortunately, or move within the same grade to another department that pays better.

I have been lucky to be promoted twice (start of 2020 and mid-2022). I don’t expect nor am I looking for further promotion imminently (in fact I have actually cut my hours due to childcare responsibilities)

Sarahspangles

You can work it out fairly easily for NHS employment.  The 2015 scheme is CARE accruing 1:54. At today’s money to achieve  £500 pcm in 5 years you’d need to average £65k over 5 years.  You mention a project in your current role, typical project roles are Band 7 to Band 8B but Band 8B is over £56k so you’re not far off?

Pro - You can retire flexibly - lots of people drawing pension while working reduced hours.  
Con - The NHS is 24/7/365 and sometimes the staff are too.

savingholmes

Another option is local government which accrues at 1/49 a year. It has major disincentives to early withdrawal which you would need to look into. In your first year you can transfer in other pensions and buy added years - if that's appropriate for you. You can also build up a tax free AVC pot for lump sums - providing it isn't worth more than 25% of your local gov pension.

Emmia

I think you should sign up with Civil Service Jobs, and then start looking at the types of job on offer, the salary levels at different grades and locations (London salaries are somewhat higher than "national" non London rates), and how the skills you have may transfer...

If you join the Civil Service (or elsewhere in the public sector) then you can boost your pension with additional contributions (presuming your salary / income allows you to do this). 

But your age is no barrier to joining, lots of people join the Civil Service later in their career.

hyubh

savingholmes said:

Another option is local government which accrues at 1/49 a year. It has major disincentives to early withdrawal which you would need to look into.

The LGPS has similar, non-punitive actuarial reductions to its peer public sector schemes though...? A bigger issue is that the median salary amongst LGPS members is lower than what the OP is after.

Moonwolf

An NHS project manager job at Band 8A might do it. 1/54th of £48.5k a year going up to £54k after 5 years. Plus 1.5% over inflation refactoring of your accrued pension, at 10 years will be about. £10K a year. You can buy up to £6.5k in additional pension and that is easier now the annual allowance is increased so you could expect to achieve £12k a year in less than 10 years.

The additional pension calculator is here.  You would be in the 2015 scheme if you aren't in the NHS now.  Someone who is 50 now would have to pay about £85K to buy £6,500 pension.  https://www.nhspensions.nhsbsa.nhs.uk/PensionCalculators/AdditionalPension/index.aspx

draiggoch

Have you calculated your number yet? How much you need to live on when you retire. Looking at the figures above they are in the vicinity of £19000 a year?
With my transfer in to the LGPS pension I was able to buy close to 80% of my annual salary. 

Not all LGPS accept transfers in.
worth a bit of investigating on your part.

Andy_L

hyubh said:

savingholmes said:

Another option is local government which accrues at 1/49 a year. It has major disincentives to early withdrawal which you would need to look into.

The LGPS has similar, non-punitive actuarial reductions to its peer public sector schemes though...? A bigger issue is that the median salary amongst LGPS members is lower than what the OP is after.

The median salary amongst the entire public sector is " lower than what the OP is after" (unless you look at niche schemes that only have higher paid members) . I suspect that by "medium public sector job" they don't mean "average salary"  but possibly middle management (IE somewhere in the middle of the upper bit)