Civil Service Pension - no more lump sum, what to do?

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  • Can anyone offer advice or at least some information so I can make an informed judgement. I am so clueless... :(

    I've recently started a civil service job and am looking to join one of their pension schemes. Now as I'm 28 I don't have plans to stay in the job (orwith the civil service) for a long time, 5 years or so is my current plan, so I am guessing that final pension isn't the best scheme?

    So I am looking to join the stakeholder pension. Although this is complicated by the fact that I want to buy a house next year and want to save some money for a deposit. First question - what would be the advantages of not putting money into a scheme and saving in an ISA instead? I'm reluctant to do that otherwise I will never get a pension (I don't currently have one).

    Second question. I have read somewhere that if I put money into a stakeholder pensions my NI contributions are reduced - what's the benefits and disadvantages of this? Does it matter if my NI contributions are reduced?

    Third question - I've been given a choice of three providers, Scottish Widows, Pru and Standard Life. Does it matter which one? They all have roughly the same choices? Am I limited to only to those three? What should be the key factor in making a provider choice?

    Any advice gratefully received, so many questions so little knowledge... :(
  • dunstonh
    dunstonh Posts: 116,033
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    I've recently started a civil service job and am looking to join one of their pension schemes. Now as I'm 28 I don't have plans to stay in the job (orwith the civil service) for a long time, 5 years or so is my current plan

    How many times I have I heard that. 30 years on and you could still be there. So many people intend to move on but never do.
    so I am guessing that final pension isn't the best scheme?

    yes it is.
    So I am looking to join the stakeholder pension

    No you are not. Many providers wont offer you a stakeholder as you are non joiner.
    Second question. I have read somewhere that if I put money into a stakeholder pensions my NI contributions are reduced - what's the benefits and disadvantages of this? Does it matter if my NI contributions are reduced?

    Your NI contributions are not reduced so that is incorrect. If the employer operates salary sacrifice there can be NI reductions but that wouldnt apply in your case.
    Third question - I've been given a choice of three providers, Scottish Widows, Pru and Standard Life. Does it matter which one? They all have roughly the same choices? Am I limited to only to those three? What should be the key factor in making a provider choice?

    It does matter a lot. For example, you wouldnt go near Pru. Scot Wid and Std Life arent bad but there are better depending on your risk profile and where you want to invest. I think Scot Wid will reject your application as they have a non joiner question on their app.

    However, none of that matters as you should be joining the scheme.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • swanny65
    swanny65 Posts: 336
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    How many times I have I heard that. 30 years on and you could still be there. So many people intend to move on but never do.


    Just clocked up my 23rd year. Joined at 18 as an filing clerk and thought i would last 6 months. Thank heavens back then the pension was automatic option.....

    Join the Civil Service scheme, even if you leave you can leave the pension until you retire or transfer to another scheme
  • Browntoa
    Browntoa Posts: 49,287
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    this is a copy of the original first post in the thread...that may be lost ??

    Hello,

    I am 28 yrs old, female and have just joined the Civil Service 'Premium' pension scheme, which no longer offers a lump sum on completion, and works on 1/60 contributions. I have about 5yrs worth of my old NHS pension scheme stored. I have the following questions:

    :confused: Should I transfer my NHS contributions in to my new civil service pension, which I understand I can do as part of the Public Sector Transfer Club (I am tempted to do this as I feel that the benefits of leaving a 5yr pension are few...?)

    :confused: What can I do to save / plan to get a lump sum for retirement - what are the best schemes or plans in order to achieve a little nest egg for retirement - which to be honest I was looking forward to from when I was in the NHS - drat the Civil Service for moving the goal posts!

    :confused: What can I do to top up my Civil Sevice Pension - as I have no intention of working until I am 60 (or even 65 as it looks like it is going to be, yuk), and want a decent pension on which to retire.

    Any advice would be most gratefully received,

    Luis.
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  • This is at a complete tangent but I'm hoping someone can help me. My soon to be ex-husband worked for PSA up until the time of its privatisation in 1993. He opted for redundancy and is now trying to tell me that his pension was cashed in at the same time. As this totally conflicts with previous government legislation, I find it very hard to believe but am hoping that someone out there also worked for PSA and can either confirm or deny his statement. Helpppppp, please - thank you.
  • tootallulah
    tootallulah Posts: 2,197 Forumite
    I am a civil servant and I don't think it's possible to "cash in" a civil service pension. If your soon to be ex was over 50 when made redundant he could have chosen to take his pension at that point on reduced (but still very favorable) rates. Otherwise the pension should be there until age 60. There is loads of information on the government's pension site for civil servants which will be current and accurate.
  • What is this about no lump sum on retiring (Civil Service Pension) I left the Civil Service about 10 years ago and am still expecting a lump sum and pension when i am 60. Is this not true
  • TREVORCOLMAN
    TREVORCOLMAN Posts: 1,001 Forumite
    paris12 wrote: »
    What is this about no lump sum on retiring (Civil Service Pension) I left the Civil Service about 10 years ago and am still expecting a lump sum and pension when i am 60. Is this not true

    Depends on what scheme you were on. If you were on the standard scheme which meant you paid 1.5% then I believe you will get a lump sum and pension.

    Do you not have some paperwork telling you this which you received when you left the CS?
    I am NOT a mortgage & insurance adviser - or anything to do with finance, that was put on by the new system I dont know why?!
  • All, I’m wondering if you could help me. I’ve read through this thread but am still non the wiser really.

    I have recently left the civil service after 7 years there (to join a private firm) and was part of the Classic scheme. They have sent me a letter through to say I will be owed approximately £2000 pa when I’m 60 along with a lump sum of nearly £7k.

    Now being a person in my mid 20’s, I’m wanting to get my own house but haven’t got enough saved for a deposit. Therefore can I cash this pension in somehow, by maybe transferring it to a private scheme and then cashing it in? The fella on the other end of the phone at the Civil Service Pensions said it wasn’t as straight forward as that but there are firms who do offer some kind of cash-in service but you inevitably take a hit with regards to the amount you lose.

    Now I realise the classic scheme is a great scheme and I would almost be ‘foolish’ to get rid of it, but am willing to take the risk that by aged 60 I will be financially comfortable and wouldn’t need £2k per year + inflation over the next 30yrs.

    So my question is, is it possible to cash it in? If so, how much could I expect to have in my hand from a pension like that? And where’s the best place to go for that service?

    thanx.
  • GPR
    GPR Posts: 20 Forumite
    Final salary schems are very good REMEMBER they are index linked so whats seems like small amount now say 5/60 (1/60th scheme)X say £24,000 (eg present salary) would equal pension of £200 but after 20,30 years or so would be worth far more
    ( and is presummably what your pension scheme people have calculated- what assumptions for inflation have they used?) and remember you probably wouldnt get much by cashing in. Whatever pension you would get from it,it would be index linked so inflation is not a factor.
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