Pension pot tiny at 52

dunstonh

Kernowshep said:

Based on the info you've given I'd agree with others, clear the debt (unless the interest rate is low), get a saving buffer (of 3-6 months spend), don't overpay the mortgage, then assuming it's LGPS add to the AVC (which you'll be able to take tax free up to limits and use this to clear/help clear the mortgage at that time if it's still going). 

It's also worth finding out if the AVC's can be done via salary sacrifice (often via my money matters) - that gives an extra boost especially if the employer adds their NI savings.

Why AVC over the APC?   £ for £ the APC is usually better value.

SarahB16

dunstonh said:

Kernowshep said:

Based on the info you've given I'd agree with others, clear the debt (unless the interest rate is low), get a saving buffer (of 3-6 months spend), don't overpay the mortgage, then assuming it's LGPS add to the AVC (which you'll be able to take tax free up to limits and use this to clear/help clear the mortgage at that time if it's still going). 

It's also worth finding out if the AVC's can be done via salary sacrifice (often via my money matters) - that gives an extra boost especially if the employer adds their NI savings.

Why AVC over the APC?   £ for £ the APC is usually better value.

All of the AVC can be taken tax free (subject to limits).  The APC is just like additional pension so subject to the usual tax rules. 

I'm in the LGPS pension scheme and am making AVC contributions with the intention of solely taking this as an AVC lump sum. No desire to take APC (due to the tax) but not the end of the world if I overshoot the limit (nice 'problem' to have).  

Not sure why you say £ for £ APC is usually better value but what are you comparing the APC to? Genuine question as in my opinion the AVC is better value than the APC due to all of the AVC being able to be taken tax free (again, subject to limits).  

QrizB

wolvoman said:

Dazed_and_C0nfused said:

wolvoman said:

If it’s a council pension then it’s highly likely to be final salary.

You’re 52 now, if you work to 67 then you’ll accrue 17 years of that pension. Based on your current salary of £29k, that would give you a pension of approx £8,000 a year (in today’s money).
Add £12k from state pension and £2k from your private pension and it totals to about £22k a year at age 67.

Given your salary and debt/mortgage situation, I’d say you should use any spare cash on paying off debt and the mortgage. And sounds like control of husband’s spending too.

All the above based on assumption that you have a final salary pension scheme from your current employer.

It's highly unlikely to be final salary.

@QrizB is almost certainly correct.

QrizB is describing a classic DB scheme.

QrizB is describing a CARE scheme, albeit I didn't cover what happens if your salary changes.

wolvoman

QrizB said:

wolvoman said:

Dazed_and_C0nfused said:

wolvoman said:

If it’s a council pension then it’s highly likely to be final salary.

You’re 52 now, if you work to 67 then you’ll accrue 17 years of that pension. Based on your current salary of £29k, that would give you a pension of approx £8,000 a year (in today’s money).
Add £12k from state pension and £2k from your private pension and it totals to about £22k a year at age 67.

Given your salary and debt/mortgage situation, I’d say you should use any spare cash on paying off debt and the mortgage. And sounds like control of husband’s spending too.

All the above based on assumption that you have a final salary pension scheme from your current employer.

It's highly unlikely to be final salary.

@QrizB is almost certainly correct.

QrizB is describing a classic DB scheme.

QrizB is describing a CARE scheme, albeit I didn't cover what happens if your salary changes.

Which isn’t materialisticly different to a final salary scheme - unless someone can show me suggested figures that show I’ve got the wrong end of the stick.

Isthisforreal99

wolvoman said:

QrizB said:

wolvoman said:

Dazed_and_C0nfused said:

wolvoman said:

If it’s a council pension then it’s highly likely to be final salary.

You’re 52 now, if you work to 67 then you’ll accrue 17 years of that pension. Based on your current salary of £29k, that would give you a pension of approx £8,000 a year (in today’s money).
Add £12k from state pension and £2k from your private pension and it totals to about £22k a year at age 67.

Given your salary and debt/mortgage situation, I’d say you should use any spare cash on paying off debt and the mortgage. And sounds like control of husband’s spending too.

All the above based on assumption that you have a final salary pension scheme from your current employer.

It's highly unlikely to be final salary.

@QrizB is almost certainly correct.

QrizB is describing a classic DB scheme.

QrizB is describing a CARE scheme, albeit I didn't cover what happens if your salary changes.

Which isn’t materialisticly different to a final salary scheme - unless someone can show me suggested figures that show I’ve got the wrong end of the stick.

A couple of promotions in a final salary scheme in your last 5/10 years of service would make a huge difference vs career average.

There's a reason LGPS/Public Sector/Civil Service ditched final salary.

BlackKnightMonty

kimwp said:

I'm really struggling to understand your maths. You say you want £14000, of which 11,973 will be provided by state pension, leaving about £2000 a year to fund and if you put in £250 a month, you will get nearly £3000 a year. Where is the £20k per year figure coming from?

Absolutely zero guarantee of any state pension.

Although the OP’s lack of wealth/private pension means they are likely to get something even if they take the state pension from nearly all of us.

Aretnap

wolvoman said:

QrizB said:

wolvoman said:

Dazed_and_C0nfused said:

wolvoman said:

If it’s a council pension then it’s highly likely to be final salary.

You’re 52 now, if you work to 67 then you’ll accrue 17 years of that pension. Based on your current salary of £29k, that would give you a pension of approx £8,000 a year (in today’s money).
Add £12k from state pension and £2k from your private pension and it totals to about £22k a year at age 67.

Given your salary and debt/mortgage situation, I’d say you should use any spare cash on paying off debt and the mortgage. And sounds like control of husband’s spending too.

All the above based on assumption that you have a final salary pension scheme from your current employer.

It's highly unlikely to be final salary.

@QrizB is almost certainly correct.

QrizB is describing a classic DB scheme.

QrizB is describing a CARE scheme, albeit I didn't cover what happens if your salary changes.

Which isn’t materialisticly different to a final salary scheme - unless someone can show me suggested figures that show I’ve got the wrong end of the stick.

It makes little difference if you stay on roughly the same salary (or rising broadly in line with inflation) throughout your career.

However as above, it can make a big difference if your salary rises significantly over your career, especially if you get a big promotion late in your career, or work a lot of overtime in your last year or two.