Merseyside pension fund

Dazed_and_C0nfused

Carolineh said:

Thank you for your posts! And to the people who told me to look at the website yes I have and saw the fraction 1/49th but do not have a clue what this equates to with the contributions that I am making. The calculators on the pension sites do not seem to calculate the end result and do about additional voluntary contributions instead! 
I have been told by lots of people that merseyside pension scheme in particular is one of the best pension schemes to have so I'm not ungrateful just trying to figure out what this all means for my future as I am trying to be more financially aware than I previously had. P

There really isn't any link between the contributions and your pension.  It's not a DC pension where you build up a pot of money.  

Maybe think of your contributions as the fee for the annual pension you build up each year.

For example as you are earning £40k your pension contributions will be £2,600/year. However these contributions will mean you save £520 in income tax so the real cost is £2,080.

In return you will accrue a pension of £816 😃.

Happy days.

Nebulous2

1/49 is the proportion of your pay which you will get as annual pension.

For every £49000 you earn you will get a pension of £1000 per year, from the point you retire, for as long as you live.

That pension will be indexed as well, to keep pace with inflation, both before it is paid, and after you retire. 

AlanP_2

Calculators can't accurately show the end result as they don't know whether you will stay as a member or what you inflation rates will be in the future.

AVCs and APCs are optional ways to increase pension at additional cost to you - employer does not contribute (with certain exceptions).

In addition to the generic LGPS website from my authority they also offered a portal where individual statements and calculators were available. Does yours have something similar?