What would YOU do? Pensionwise

fimonkey

WOW and thrice WOW! Thanks Retired IFA for your help so far, I owe you a crate of beer!

Am slowly trying to work thorugh the calulations the other thread http://forums.moneysavingexpert.com/showthread.html?t=888587 and am heartened to see I arrived at the same figures as you so far (i.e contribution needed and reduced salary. I hadn't worked out the difference in net take home pay of £13p/m however, thanks again for that, helps greatly when making a decision.

Thanks to everyone else so far too, I am learning so much from this thread and it's empoyering to be able to understand SOME of it. :j

PS, My cat's being enjoying the snooker too!

fimonkey

Newly_retired wrote: »

Is there any possibility of your changing schools? eg moving to a state school or an independent school which operates the TPS properly? It is a good scheme. Don't forget you may well get promotion before retirement which will mean your final salary is higher, therefore your pension is higher.

Yes this is a possibility, though not for at least 8 years (just starting a PhD with my current employers), I may also move into the private sector if I decide to pursue research as a career... so I can't say for definate yet.

Retired_I.F.A.

"I'm slowly trying to work through the calculations in the other thread"

Don't bother I've done them all. All you've got to do is promise me you'll read it and not decide which way to go until you understand it 100%.
It's not that difficult to follow honest. It's took me so long really because I've had to re write a spreadsheet from scratch that I used to use and read a fair bit on changes that have happened since I retired.

Are they pressuring you for a decision?

I reckon as I'm playing snooker virtually all day tues, got a fishing club meeting tues night I should finish it off late tues/wed morn. I've found a freebie place to host it so anyone interested can help themselves and then throw in their comments from Wednesday night say.

Retired_I.F.A.

Firmonkey...

Finally

Click o the link and you will find 3 files to download, a word doc to read first, a speadsheet to play around with and another to see drawdown tables.

http://www.esnips.com/fm/708da977-dc24-482d-a4bc-c6c6dd07dbf0/?v=92623&source=ws

Milarky

I wonder how long the government will allow salary sacrifice for - it being such a good deal for the average employee - and expensive to the taxpayer - without access to a final salary scheme?

Effectively salary sacrifice can double a basic rate taxpayer's rebate on contributions:

Example
10% gross salary given up = 12.38% including NI saving
(£8 nomimal contribution, from £10 gross pay foregone, becomes £12.38: £2 tax relief, £1.10 employee NIC, £1.28 employers NIC)

£12.38 gross from net pay, requires £9.90 from basic rate net pay. £9.90 net represent £14.35 gross pay - and the employer forks out £1.84 in NIC on that - a total cost of £16.18. So the government keeps/loses £3.80)

I can see them saying in a few years (perhaps around the time 'personal accounts' are introduced): "Right anyone already in a sacrifice scheme can continue to keep the benefits - but if they leave the present employer they can't requalify anywhere else - and noone who is not already in a salary sacrifice can now join one because (hey presto!) we've just solved the pensions crisis with our PAs)

Retired_I.F.A.

That will never happen simply because there is no such thing as a salary sacrifice scheme. You cant legislate against something that does not exist.

If you rearrange your salary and benefits you are effecting a new contract of employment. The only way salary sacrifice will be done away with is if the government stop employers contributing to pension schemes. Besides which they are more likely methinks to clamp down on the far bigger expense that of directors taking their income via dividends as that just makes the 40% tax bracket look like a farce.