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USS or Civil Service Alpha?
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NewWorldTempo
Posts: 2 Newbie

Hi all,
Currently looking at a role which offers a USS pension. I am currently a civil servant and pay into the Alpha scheme. In the past, I was under the assumption that USS was a very good pension but, reading into it, it doesn't look all that great compared to the Alpha scheme.
I believe USS has a contribution rate of 6.1%, while Alpha is 5.45%. The accrual rate for Alpha is 2.32% of your salary and the USS is roughly 1.33% (1/75th of your salary).
I realise there will be other details to consider such as death benefits for spouse etc but, on the basics, am I missing something?
Thanks!
Currently looking at a role which offers a USS pension. I am currently a civil servant and pay into the Alpha scheme. In the past, I was under the assumption that USS was a very good pension but, reading into it, it doesn't look all that great compared to the Alpha scheme.
I believe USS has a contribution rate of 6.1%, while Alpha is 5.45%. The accrual rate for Alpha is 2.32% of your salary and the USS is roughly 1.33% (1/75th of your salary).
I realise there will be other details to consider such as death benefits for spouse etc but, on the basics, am I missing something?
Thanks!
0
Comments
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Alpha is significantly better. There may be other factors to consider of course.1
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NewWorldTempo said:Hi all,
Currently looking at a role which offers a USS pension. I am currently a civil servant and pay into the Alpha scheme. In the past, I was under the assumption that USS was a very good pension but, reading into it, it doesn't look all that great compared to the Alpha scheme.
I believe USS has a contribution rate of 6.1%, while Alpha is 5.45%. The accrual rate for Alpha is 2.32% of your salary and the USS is roughly 1.33% (1/75th of your salary).
I realise there will be other details to consider such as death benefits for spouse etc but, on the basics, am I missing something?
Thanks!1 -
Thanks for the comments. It's quite a difference it seems. Such a shame, as I recall colleagues talking about USS as a real gold standard of pensions.
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USS is in a mess, totally mismanaged. I was able to transfer my service into the NHS in 2010 and so glad I did. Best avoided if you can
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NewWorldTempo said:Thanks for the comments. It's quite a difference it seems. Such a shame, as I recall colleagues talking about USS as a real gold standard of pensions.It's very hard to find a better private pension scheme than USS - at least, it's hard to find one that is open. That much I will say in their defence.I left the sector in 2022 after the pension was cut to 1/85 with a 2.5% hard cap on inflation. This was evidently a cut too far as these cuts were reverted in 2024. Too late for myself and many others, though - I can't imagine going back, now.Anyway, in a roundabout way of answering your question I literally quit my career of 20 years to get into Alpha instead of USS, and I would do it again in a heartbeat.Lots of experience reading the board have highlighted a number of advantages that USS has - such as a better way of managing the retirement age - but none come close to filling in the gap induced by close to twice the accrual rate.Don't live your whole life for your pension, if the job will be fulfilling consider whether it is worth the sacrifice. But be under no illusions, it is a sacrifice, and not a small one.1
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I’m not familiar with the Alpha scheme, only USS, but one of the things I do like about USS is the Investment Builder (effectively, a DC pension pot but one that can be viewed purely as a means of building up cash if preferred). This is coupled to the ability - at my institution - to put money into the IB via a Salary Sacrifice scheme which brings tax/NI relief benefits. To give an indicator, I can put £2,500 each month into the IB and because it’s done via SS the net cost to me is only £1,500 (roughly). That’s a grand going into my investment pots rather than to the taxman etc., and when I come to take it out I get 25% of the fund value tax-free (and, in my case, will pay 20% tax on the remainder, resulting in an effective tax rate of only 15%). Even assuming zero growth in the investment funds, that works out at £2,125 for a cost of £1,500. Something similar may be available in Alpha? There’s also the 3 x annuity tax-free lump sum with USS (again, not sure whether something similar applies to Alpha).0
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