Very grateful to have made it! Now to the future!

MetaPhysical

Employer pension contributions are oft-overlooked but a generous employer pension scheme is one of the most valuable benefits you can possibly get. A few extra hundred quid a month early in career can amount to hundreds of thousands of pounds of extra pension come retirement time.

german_keeper

GrubbyGirl_2 said:

It's not very often that you can say ignorance is bliss when it comes to pensions but in my case it was.  I started in the NHS at age 18 in 1978 and although my pay slip said I paid superannuation I had no idea what that was and at 18 and earning for the first time I was just interested in the bottom line.  I eventually found out it was pension but had no clue that although the NHS auto enrolled you I could choose to come out.  That was the one bit of ignorance I was very grateful for.  I retired at 60 after 42 years on a final salary pension after joining at the very bottom pay scale and retiring at the top.  They give you a hypothetical annuity amount and for me it was £1.8million.  I could never have achieved that with a defined contribution pension.

Just as an aside when public sector people are wanting a nice pay rise they don't appreciate how much the government pays into their pensions (for the NHS it's just over 20%) which is arguably all part of their remuneration package.  I fear that if big pay rises are wanted the way to afford them is to reduce pension contributions which may spell the death knell of the DB pension in the public sector.  They need to be careful what they wish for.

I am also very happy to have a good pension after 40 years in the Civil Service. But here's a slightly different take on your final paragraph. 

From the PCSPS Guide Version 5 November 1998:

Your pension, together with your pay, forms part of your total remuneration package. Although there is no overt contribution towards the PCSPS, salaries are set at levels which take account of the value of the benefits provided by the Scheme.

That is when it was a non contributory scheme, So when it became a contributory scheme, about 2012 or 2013 if memory serves, and I had to start paying 5.45%, that was a pay cut. Not a real terms pay cut but an actual pay cut of 3.95%. Not 5.45% cut because even though it had been a non contributory scheme we still paid 1.5% widows and orphans.  

Then in the last 12 years before I retired my salary, and therefore my final salary pension, lost just over 20% compared to CPI.  

This isn't supposed to trigger the inevitable public versus private sector debate (please don't anyone do that), just trying to show that there are always two sides to any debate. 

katejo

GibbsRule_No3. said:

Sush!  Don't tell people how well we are doing with DBs or THEY will come for us ;-)

The fact it wasn't our fault when we started work and our Pensions were looked after for us, without us paying much attention, other than our wages were probably less than employments that did not offer DBs, as they expected you to use the extra to buy a Pension.

Yes very aware of this. My salary has never been high (never higher rate tax payer and started on £11K in 1990). However, started my DB pension straight away and added AVC 4 years later. 

michaels

german_keeper said:

GrubbyGirl_2 said:

It's not very often that you can say ignorance is bliss when it comes to pensions but in my case it was.  I started in the NHS at age 18 in 1978 and although my pay slip said I paid superannuation I had no idea what that was and at 18 and earning for the first time I was just interested in the bottom line.  I eventually found out it was pension but had no clue that although the NHS auto enrolled you I could choose to come out.  That was the one bit of ignorance I was very grateful for.  I retired at 60 after 42 years on a final salary pension after joining at the very bottom pay scale and retiring at the top.  They give you a hypothetical annuity amount and for me it was £1.8million.  I could never have achieved that with a defined contribution pension.

Just as an aside when public sector people are wanting a nice pay rise they don't appreciate how much the government pays into their pensions (for the NHS it's just over 20%) which is arguably all part of their remuneration package.  I fear that if big pay rises are wanted the way to afford them is to reduce pension contributions which may spell the death knell of the DB pension in the public sector.  They need to be careful what they wish for.

I am also very happy to have a good pension after 40 years in the Civil Service. But here's a slightly different take on your final paragraph. 

From the PCSPS Guide Version 5 November 1998:

Your pension, together with your pay, forms part of your total remuneration package. Although there is no overt contribution towards the PCSPS, salaries are set at levels which take account of the value of the benefits provided by the Scheme.

That is when it was a non contributory scheme, So when it became a contributory scheme, about 2012 or 2013 if memory serves, and I had to start paying 5.45%, that was a pay cut. Not a real terms pay cut but an actual pay cut of 3.95%. Not 5.45% cut because even though it had been a non contributory scheme we still paid 1.5% widows and orphans.  

Then in the last 12 years before I retired my salary, and therefore my final salary pension, lost just over 20% compared to CPI.  

This isn't supposed to trigger the inevitable public versus private sector debate (please don't anyone do that), just trying to show that there are always two sides to any debate. 

Yep, the gov brought in carm (alpha etc) to save money but with salaries falling sharply in real terms it is actually more costly than FS.....

GibbsRule_No3.

Does the contribution, if worked out, just mean that less tax can be paid, so take home pay should still work out okay?  When I started contributing to my current Stake Holder pension, I just picked a random % number above 6%  (shame on me) I was only expecting to do it for a couple of years and used it as a savings account, knowing work would be paying 6% max if I paid at least 6% so better rate than a savings account away from work. If I’d know I could have reduced my tax contribution, paid more in but took home roughly the same I would have put even more in. Now 5 years later, work have stopped the DB scheme for some of my colleagues and given the SH people a better deal 9% if matched, I have now upped my contribution as well, still probably not as much as I could to save even more tax but I’m not sure now many years or even months I can stay at work. This is boosting my savings and I’m trying to live on my Pensions and ignoring the monthly wages (I’m also putting money into an ISA now) so I won’t notice the monthly drop when I do eventually stop or get asked to leave work.  SH will drip feed my retirement years, while my DBs and SP will be used for everyday living. I do unfortunately rent.

Albermarle

MetaPhysical said:

Employer pension contributions are oft-overlooked but a generous employer pension scheme is one of the most valuable benefits you can possibly get. A few extra hundred quid a month early in career can amount to hundreds of thousands of pounds of extra pension come retirement time.

Yes and there can be wide differences of employer contributions even with DC, from 3 % to 20% ? ( although the latter is not all typical) Even the difference between 3% and 8% can make a big difference long term, especially if you match the 8% from a relatively young age.

[Deleted User]

I didn’t really wish this thread to become a discussion about pensions and contributions. It was just to record my reaching state pension age and remind others about how fortunate they are to have a db pension. I will request the thread closure.

Request has been sent.

george_jetson

michaels said:

german_keeper said:

GrubbyGirl_2 said:

It's not very often that you can say ignorance is bliss when it comes to pensions but in my case it was.  I started in the NHS at age 18 in 1978 and although my pay slip said I paid superannuation I had no idea what that was and at 18 and earning for the first time I was just interested in the bottom line.  I eventually found out it was pension but had no clue that although the NHS auto enrolled you I could choose to come out.  That was the one bit of ignorance I was very grateful for.  I retired at 60 after 42 years on a final salary pension after joining at the very bottom pay scale and retiring at the top.  They give you a hypothetical annuity amount and for me it was £1.8million.  I could never have achieved that with a defined contribution pension.

Just as an aside when public sector people are wanting a nice pay rise they don't appreciate how much the government pays into their pensions (for the NHS it's just over 20%) which is arguably all part of their remuneration package.  I fear that if big pay rises are wanted the way to afford them is to reduce pension contributions which may spell the death knell of the DB pension in the public sector.  They need to be careful what they wish for.

I am also very happy to have a good pension after 40 years in the Civil Service. But here's a slightly different take on your final paragraph. 

From the PCSPS Guide Version 5 November 1998:

Your pension, together with your pay, forms part of your total remuneration package. Although there is no overt contribution towards the PCSPS, salaries are set at levels which take account of the value of the benefits provided by the Scheme.

That is when it was a non contributory scheme, So when it became a contributory scheme, about 2012 or 2013 if memory serves, and I had to start paying 5.45%, that was a pay cut. Not a real terms pay cut but an actual pay cut of 3.95%. Not 5.45% cut because even though it had been a non contributory scheme we still paid 1.5% widows and orphans.  

Then in the last 12 years before I retired my salary, and therefore my final salary pension, lost just over 20% compared to CPI.  

This isn't supposed to trigger the inevitable public versus private sector debate (please don't anyone do that), just trying to show that there are always two sides to any debate. 

Yep, the gov brought in carm (alpha etc) to save money but with salaries falling sharply in real terms it is actually more costly than FS.....

I always assumed Alpha would be “worse” than preceding schemes but far from it it would appear. Especially for those not too far from retirement…

Dazed_and_C0nfused

george_jetson said:

michaels said:

german_keeper said:

GrubbyGirl_2 said:

It's not very often that you can say ignorance is bliss when it comes to pensions but in my case it was.  I started in the NHS at age 18 in 1978 and although my pay slip said I paid superannuation I had no idea what that was and at 18 and earning for the first time I was just interested in the bottom line.  I eventually found out it was pension but had no clue that although the NHS auto enrolled you I could choose to come out.  That was the one bit of ignorance I was very grateful for.  I retired at 60 after 42 years on a final salary pension after joining at the very bottom pay scale and retiring at the top.  They give you a hypothetical annuity amount and for me it was £1.8million.  I could never have achieved that with a defined contribution pension.

Just as an aside when public sector people are wanting a nice pay rise they don't appreciate how much the government pays into their pensions (for the NHS it's just over 20%) which is arguably all part of their remuneration package.  I fear that if big pay rises are wanted the way to afford them is to reduce pension contributions which may spell the death knell of the DB pension in the public sector.  They need to be careful what they wish for.

I am also very happy to have a good pension after 40 years in the Civil Service. But here's a slightly different take on your final paragraph. 

From the PCSPS Guide Version 5 November 1998:

Your pension, together with your pay, forms part of your total remuneration package. Although there is no overt contribution towards the PCSPS, salaries are set at levels which take account of the value of the benefits provided by the Scheme.

That is when it was a non contributory scheme, So when it became a contributory scheme, about 2012 or 2013 if memory serves, and I had to start paying 5.45%, that was a pay cut. Not a real terms pay cut but an actual pay cut of 3.95%. Not 5.45% cut because even though it had been a non contributory scheme we still paid 1.5% widows and orphans.  

Then in the last 12 years before I retired my salary, and therefore my final salary pension, lost just over 20% compared to CPI.  

This isn't supposed to trigger the inevitable public versus private sector debate (please don't anyone do that), just trying to show that there are always two sides to any debate. 

Yep, the gov brought in carm (alpha etc) to save money but with salaries falling sharply in real terms it is actually more costly than FS.....

I always assumed Alpha would be “worse” than preceding schemes but far from it it would appear. Especially for those not too far from retirement…

I know it's more nuanced than this and how people's career goes will be a big factor but taking PCSPS as an example the old Classic Vs Alpha shows a marked increase in the basic pension accrual.

Classic = 1/80th (+ 3x pension automatic PCLS)
Alpha = 1/43rd (but no automatic PCLS)

Roger175

[Deleted User] said:

I didn’t really wish this thread to become a discussion about pensions and contributions. It was just to record my reaching state pension age and remind others about how fortunate they are to have a db pension. I will request the thread closure.

Request has been sent.

Why! As somebody who's arguably had to do it the hard way (no DB pension), I find this discussion fascinating. When you post something here, you have little control of the discussion which follows.