Has anyone every stopped themselves topping or buying more in DB Pensions...

german_keeper

Andy_L said:

Plenty (the majority?) of people in a DB pension don't top up/buy more pension

Some Reasons:
1. The baseline accumulation is "enough"
2. They would rather have the money now rather than in the future
3. The offer isn't very good
4. The scheme doesn't have the option/they don't meet the criteria to buy more

And 5. They can't afford to!

Sarahspangles

IAMIAM said:

Like NHS/Civil/TPS etc as ultimately the pension dies with you......and you cannot transfer out either....

I know what you mean, the public sector schemes are fairly strict about who is eligible for death in service benefits or a dependent’s pension, whereas you can leave your SIPP to your estate. But then the db schemes come with valuable employer contributions and index linking. Unless you’re very pessimistic about surviving long in retirement it makes sense to cover your retirement income needs before trying to accumulate a pot to leave when you go. You can always bank the pension income that is surplus to your needs.

m_c_s

One important factor for later in retirement is State Pension. The new state pension is £10.6k which is effectively a DB without spouse benefits. That is a quite a big uplift of income for most people so perhaps funding the time between ones DB and SP could be a priority to maintain similar income levels through out retirement.
This period could be a target for the funds rather than enhancing the DB element.

zagubov

I started teaching later than average so had to contribute extra to make up the missed years. I bought 3 years worth of Past Added Years and an AVC to cover the other 1.5 years I needed.

After a decade I realised the AVC was costing twice as much as the past added years so I froze it and upped the past added years - left me with more spendable income which I needed as London's expensive.

An important point is that if you switch employer your extra contributions can get missed out and you'll have to chase the finance/payroll department to make sure they pay the right amount ( happened to me every time and in one case took about three years to fix )

I retired slightly early on an actuarially reduced pension but then returned to work where I'm earning a second pension. My wife will inherit half of each of these when I fall off my perch.

Surveys show you're better off working at least part-time after you retire, and better if it's in a familiar job.

AlanP_2

zagubov said:

Surveys show you're better off working at least part-time after you retire, and better if it's in a familiar job.

Better off how? If you mean financially then surely that's obvious.

Strange how we all have our own view of the world isn't it? To me, working part time means you haven't retired.

zagubov

AlanP_2 said:

zagubov said:

Surveys show you're better off working at least part-time after you retire, and better if it's in a familiar job.

Better off how? If you mean financially then surely that's obvious.

Strange how we all have our own view of the world isn't it? To me, working part time means you haven't retired.

There have been studies showing that retirees are happier or more satisfied if they continue to work but not full-time. I think this link relaters to that.

They get the benefits of structure, social contact, and yes financial benefits. It probably matters quite a lot how well you get on with your co-workers, customers, etc.

On the other hand amongst those re-employed retirees the happiest ones are those doing familiar work so there isn't a stressful steep learning curve.

NlghtOwl

I would rather save any extra in my SIPP or ISA rather than top up DB to gain the flexibility for the reasons others have given above.

daz378

 I wouldn't use cash/ savings to top up my dB pension, as I may need the liquidity...but from next year may consider salary sacrifice to mitigate the fiscal drag effects of tax bands staying the same

zagubov

To bring this back more on-topic I should add that people who return to work can provide for their survivors vis death-in-service benefits.

For example in teaching (in England) your spouse can get a payout of three years salary if you die while employed. IIRC, it takes a few years to kick in when you've returned to work, but if you die after you've started retirement you also get a tax-free death grant which starts off as three years pension but declines over the first three years by the amount of pension you've received.
So, you're covered that way while you re-start your teaching.

From experience, working part-time is a bit of a win-win for you and your employer., but you need to make sure your new work isn't more than say 0.6 of your full-time work. Anything above that will very soon start to feel like a full-time job if you're not careful. You do find you're using your experience to contribute more than your paid share of the working job.

Also if you retire at your Natural Retirement Age, you can't then work so much that you'd earn more than your annual Salary of Reference; if you work much more than around half-time you may get chunks of your pension clawed back by the tax man so you're working for no extra money.

claire111

I purchased NHS 'Additional Pension' some years ago (Different from AVCs, topping up etc).

At the time I calculated that providing I lived a further 10 years after taking retirement at age 65, that I would break even against the cost to me, and everything else would be 'Free Money'. 

Sorry to say I didn't consider the young'uns !