I'm embarrassed that I can't work this out - any help gratefully received.

kermchem

There are some USS experts on this forum, and I am not one of them, but I have learned a lot recently about the scheme I have been in for over 30 years.

1. I very much doubt that USS have said that their pension scheme is not very good. It is very likely that you have read something from UCU (the union that most English and Welsh university staff in USS can join). UCU are right if they tell you that USS is not as good as the final salary pension schemes our parents enjoyed, and which USS was when I started work three decades ago. USS has changed so that it now has a defined benefit (DB) part, which the strikes in 2018-2022 successfully fought to defend, and then there is the defined contribution part on the part of your salary over the threshold. Your OH has a salary above the threshold.

2. The employer pays 14.5% of your salary, and you pay 6.1%. Below the threshold all of this goes into the DB scheme. Above the threshold all of your contribution goes into the DC pot and most of the employer's - a bit goes into rectifying past shortfalls (ugh!).

3. My employer uses salary sacrifice, and my monthly pay slip shows my annual salary, a deduction for salary sacrifice, and then what I get "paid", before PAYE and NI are taken off. My guess would be that since salary sacrifice means the empoyee saves 2% NI, and the employer saves a much bigger % NI, that just about every USS employer probably uses salary sacrifice - after all they are all screaming how broke they are, and this saves them millions.

4. As USS is a hybrid scheme, the calculation of how much of the annual allowance is used is not simple. The part of the annual allowance used by the DB part is NOT how much money employee and employer have paid in, instead it is a calculation of how much your benefits have grown by in the year being considered. That is why you can only have last year's number. The contibution to the DC and any SIPP etc is counted 1:1 towards the annual allowance.

5. Most workers in the UK would really like to have a DB scheme like USS, civil service, NHS, teachers, LGPS and similar. The payout will be mostly index linked, and is secure unless USS invests some more in Thames Water. Those who are saving a total of 8% employee plus employer into a workplace scheme with high fees and no ideas which fund they are in are not going to be in as good a place when they retire.

I have spent most of my career paying a small amounts into a FSAVC, now a SIPP, getting the 20% tax added to my contribution by the provider and claiming the other 20% through a tax return (kids and my OH earning less than me meant SIPP contibutions saved the child benefit being taxed from me). I played stock market investment with my SIPP, as I treated it as a gamble pot. Now, as I near retirement I am making large contributions to the USS DC by salary sacrifice - the default USS funds are not going to be as much fun as investment games, but are safer, less risky.

I recommend your OH logs in to MyUSS, where they can see how much they and employer have contributed to the DC part month by mont, as he is over the threshold.

Within MyUSS you can also specify a monthly additional sum that you contribute to the DC pot. My employer runs their payroll about 10th of the month, so I can make changes before then and it comes out by salary sacrifice at the end of the month. USS imply that not all employers make changes as quickly.

Your OH could contribute taxed take home salary to a SIPP, the provider claims 20% tax from HMRC and OH claims the other 20%. Then manage the invesments in SIPP. Or add it to their DC pot in USS, and employer will then take 40% PAYE and 2% NI off what is left.

Good luck. Pensions can be simple.

Cobbler_tone

kermchem said:

3. My employer uses salary sacrifice, and my monthly pay slip shows my annual salary, a deduction for salary sacrifice, and then what I get "paid", before PAYE and NI are taken off. My guess would be that since salary sacrifice means the empoyee saves 2% NI, and the employer saves a much bigger % NI, that just about every USS employer probably uses salary sacrifice - after all they are all screaming how broke they are, and this saves them millions.

I have presented this to my employer with a (cheeky) ask for some shared saving in terms of NI. In my particular circumstance my SS saves them over £2,500 per year. I know the answer will be 'no' and the rationale will probably be that the majority of employees can't afford to increase their contributions and the core company contribution is generous and costly. The table I provided does demonstrate where their employer contribution is pretty much self funding compared to the company NI saving. I always take the view of if you don't ask you don't get. I know some other companies do it, as read it several times on here.

owlowlowl

Thank you all so, SO much. There is a lot of absolutely brilliant advice on here and I'm incredibly grateful to every one of you for taking the time and effort to help me. And thank you, also, for all the encouragement. I do feel like my illness has left us with a problem, and I'm trying to figure out how to make up the shortfall that I have caused. Having such kind handholding to say "Actually you are doing OK" is hugely calming and has allayed some of the huge anxiety I have been feeling.

I will go away and work through each of these comments very carefully. I may be back with questions, but I will undoubtedly learn tons as I go through these. 

Thank you, I'm immensely grateful for your patience and kindness.