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Penion Decisions Tps

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mods please move after a while

i have a big decision to make and im hoping that you people (who are the smartest i know- in general) can help me.

heres my situation

graduated 2004- £14k student loans. paid literally zero back since 2004 despite notifying them i was earning!!! **** up at there end.

at 27 went into teaching. now 32 and part time on 0.7 4 days a week. mrs works full time and is happy on £20k

i choose teaching as its someting i enjoy and my work life balance could not be better. contacts mean i could easily earn £35k plus at the drop of a hat for 60hours/week plus but i choose not to. im a qualified locksmith, and a an awesome salesperson to the extent i have people chasing me 5 years after i have retired form sales! im quite happy on 4days a week plus other little earners on the "side" i enjoy my job and have never been happier.

feb 2014 bought a monster bargain of a house. £58k house in South yorks. currently £10k in to renovation and another £10k to find. mortgage is £450 a month on a 7 year fix. overpaying and should be paid off in another 11 years by the time im 42 :-)

im quite happy to live in this house until my dying days (nice area, quiet, good schools, big enough for 2 kids)

the decision i have is about retirement plans and the TPS. 8.6% gross contributions if i join. my HR person is useless when it comes to the detail,, as is the TPS website. i have opted out so far. i do not intend to be in a classroom past the age of 60 at the latest which means if i enter now i will have around 20 years paid in to the TPS. for full pension i believe you need 40 years of accruals. however if you draw your pension before 65 you lose 5% for every year that you take it earlier so if you take at 60 you lose 25%!!! in reality i would stop teaching at 60 and then do something else for 5 years. claim pension at 65.

is anyone bright enough to calculate the amount I would pay in. and how long i would need to live for for me to break even, what i dont want is for people to compare the TPS to a private pension. private pensions are shite....just because the TPS is better doesnt mean to say it is worth joining. so please dont tell me that the TPS is worth joining as its one of the best pensions out there.its like comparing measles to genital warts...i want neither

plus there is the added factor that i dont believe i will get what is promised. inflation, extending retirement age and i believe that the state pension will eventually get means tested meaning that private pensions holders will get fk all.

i follow 2 mottos in life

1. if the gubbermint tells you to do one thing.....do the opposite

2. if you have nothing you get something, and if you have something you get nothing

anybody understand the nitty gritty of how it would look because even the HR goon doesnt have a scooby doo when i started asking probing questions

thanks

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If necessary, I would pay for third party advice rather than rely on some randoms on a website.

It seems to me that you want someone to do a pension calculation/illustration for you - and the thing I find baffling is why the TPS won't do this for you (practically every private pension company will do so as part of their pre-sales). If HR is useless - talk to the union about how you'd get a personal illustration done.

I largely agree with your mottos btw. Although I would adjust the second to read:

If you have nothing, you get something; if you have a little something, you get nothing; if you have a lot of something, you get everything.

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Public sector pensions pay out 1/80 of average earned rather than final salary (I believe) these days.

I'd guess your life expectancy would be something like 90 and I assume the contact pays out from 65 not state retirement age which will be about 70 by then.

So if you earn on average 35k per year you will get a pension of 34/80 or £14875 superannuated.

Average aggregate (in today's money) £370,000 +lump sum?

Paid in in real terms (34 x 3010) = £102340.

Where can you get growth like this, the employer and taxpayer chip in massively. The country isn't bankrupt on these schemes for nothing.

Not only start paying, backdate if possible. Even with an 80% haircut you could still be in the money if the country implodes paying these gold plated schemes.

Edited by crashmonitor

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The only thing useful I can add is.

Remember if you are a low rate tax payer there is no point earning more than £10,600 a year in pension.

Pensions only work if you pay money in at a higher tax rate than you take it out. State pension will take halve your tax free allowance.

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Public sector pensions pay out 1/80 of average earned rather than final salary (I believe) these days.

I'd guess your life expectancy would be something like 90 and I assume the contact pays out from 65 not state retirement age which will be about 70 by then.

So if you earn on average 35k per year you will get a pension of 34/80 or £14875 superannuated.

Average aggregate (in today's money) £505,750

Paid in in real terms (34 x 3010) = £102340.

Where can you get growth like this, the employer and taxpayer chip in massively. The country isn't bankrupt on these schemes for nothing.

Not only start paying bloody backdate if possible. the scheme is the bigges6 steal in the history of mankind.

It used to be that public sector workers accepted significantly less salary in return for job security and a cast iron pension. These days public sector pay is mostly equal to, or better than, that in the private sector, but the cast iron pensions remain.

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It used to be that public sector workers accepted significantly less salary in return for job security and a cast iron pension. These days public sector pay is mostly equal to, or better than, that in the private sector, but the cast iron pensions remain.

Last figures I saw, a while back so might have changed, public sector average pay was higher, by quite a margin.

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It used to be that public sector workers accepted significantly less salary in return for job security and a cast iron pension. These days public sector pay is mostly equal to, or better than, that in the private sector, but the cast iron pensions remain.

The superannuated pension in the example I have given is worth 40% of salary for a sacrifice of 8.6%.

Even with massive Greek style haircuts, you are just going to be in the money so long as you don't die first.

Edited by crashmonitor

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Public sector pensions pay out 1/80 of average earned rather than final salary (I believe) these days.

I'd guess your life expectancy would be something like 90 and I assume the contact pays out from 65 not state retirement age which will be about 70 by then.

So if you earn on average 35k per year you will get a pension of 34/80 or £14875 superannuated.

Average aggregate (in today's money) £505,750

Paid in in real terms (34 x 3010) = £102340.

Where can you get growth like this, the employer and taxpayer chip in massively. The country isn't bankrupt on these schemes for nothing.

Not only start paying, bloody backdate if possible. The scheme is the biggest steal in the history of mankind. Even with an 80% haircut you could still be in the money if the country implodes paying these gold plated schemes.

ahh yes I was thinking of pension vis ISA. ISA have less charges. Who knows what investments are going to do over the decades my guess is that the future is not going to be as rosy as the past.

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Don't stop doing the day job that you enjoy and pay into the TPS. My mother was a teacher for 40 years working 0.7 of a full-time contract and gets ~£800 a month from the TPS (not sure if this is befor/aftertax though) on top of the state pension and no mortgage could seem pretty good IMO.

Re. private ISA/Pensions assume you'll get out what you put in (inflation adjusted) so £250 a month put aside will provide you £250 extra a month equivalent.

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Public sector pensions pay out 1/80 of average earned rather than final salary (I believe) these days.

I'd guess your life expectancy would be something like 90 and I assume the contact pays out from 65 not state retirement age which will be about 70 by then.

So if you earn on average 35k per year you will get a pension of 34/80 or £14875 superannuated.

Average aggregate (in today's money) £505,750

Paid in in real terms (34 x 3010) = £102340.

Where can you get growth like this, the employer and taxpayer chip in massively. The country isn't bankrupt on these schemes for nothing.

Not only start paying, bloody backdate if possible. The scheme is the biggest steal in the history of mankind. Even with an 80% haircut you could still be in the money if the country implodes paying these gold plated schemes.

If it pays out.

For an extreme example, Greece's public sector jobs + pension were great until quite recent.

Most public sector pension schemes and jobs struggle when the pensions are eating more than 50% of the money.

The UK has seen that with the fire brigade.

Its seeing it now with the police.

The civil service, teaching + NHS cannot be far behind.

I would join the pension but plane to have to retire much later (70+) for a smaller pension.

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If it pays out.

:D:D

Yeah, that's the problem with all pensions right now.

Why do you think they are letting millions of immigrants into the country ?

This is why:

350px-Pyramid_scheme.svg.png

We are on level 9/10, we need another 100 Million immigrants.

Still the landed gentry/establishment with their high walls and helicopters wont have to live amongst the people they tell us they represent.

My private pension contributions over 10 years would have been better off in a savings account.

the fact the government keeps brining in legislation to try and coerce people into paying into a private pensions tells you all you need to know.

When it becomes 100% compulsory ( and it will come ), that is the day I pack up work and leave, for that's the day you know the pension ponzi is a goner. A compulsory pension would be more tax by another name, a tax going straight to the spivs in London. I'll say no thanks to that.

Edited by TheCountOfNowhere

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If it pays out.

For an extreme example, Greece's public sector jobs + pension were great until quite recent.

Most public sector pension schemes and jobs struggle when the pensions are eating more than 50% of the money.

The UK has seen that with the fire brigade.

Its seeing it now with the police.

The civil service, teaching + NHS cannot be far behind.

I would join the pension but plane to have to retire much later (70+) for a smaller pension.

I'd take my chance, he needs an 80% haircut to be out of pocket...the scheme is worth 40% of salary for an 8.6% sacrifice.

It might be a Ponzi scheme, but it's a contract with the Government not with Mr Ponzi.

Edited by crashmonitor

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I'd take my chance, he needs an 80% haircut to be out of pocket...the scheme is worth 40% of salary for an 8.6% sacrifice.

It might be a Ponzi scheme, but it's a contract with the Government not with Mr Ponzi.

NHS is an admitted Ponzi...current pensioners are paid out of current contributions, made up with Government cash. TODAY.

When I start, I will not hesitate to join.

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At the end of the day the British government hasn't reneged on any monetary contract in 300 years, it has changed the terms of some mid stream but existing contributions have always been safeguarded.

What really does my head in, is the fact that we are going out of our way to honour these contracts, we are running a structural deficit of 6% and for those of us that get nothing we have to put up with a tirade of abuse about austerity from the BBC and the Question time audience on dream retirement packages. They really don't get what austerity is do they.

Edited by crashmonitor

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and I assume the contact pays out from 65 not state retirement age which will be about 70 by then.

You'd have to research other schemes, but for the NHS scheme:

A Normal Pension Age equal to the State Pension Age, which applies both to active members and deferred members (new scheme service only). If a member’s SPA rises, then NPA will do so too for all post 2015 service

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/216219/dh_133003.pdf

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At the end of the day the British government hasn't reneged on any monetary contract in 300 years, it has changed the terms of some mid stream but existing contributions have always been safeguarded.

Nor did it lower interest rates to 0.5% in that time either.

Something tells me something is wrong.

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At the end of the day the British government hasn't reneged on any monetary contract in 300 years, it has changed the terms of some mid stream but existing contributions have always been safeguarded.

What really does my head in, is the fact that we are going out of our way to honour these contracts, we are running a structural deficit of 6% and for those of us that get nothing we have to put up with a tirade of abuse about austerity from the BBC and the f**king Question time audience on dream retirement packages. They really don't get what austerity is do they.

Hard to draw a comparison.

Outside of wars, the UK has never really committed itself to large scale, unfunded pension commitments to a large number of individuals. previously, most UK borrowing was between other countries and large banks/commercial borrowing.

The pension commitments only started cranking up the 70s when it started become very obvious that life-expectancies started to go up a very rapid rate (in actuarial/demographic rates).

The private sector was cuahgt out by the same thing - except the private sector was a lot better funded.

Few percentages off the real expected return, and few more years on the expected lifetime and - poof! - your pension commitments become a massive burden.

Off course, that one-eyed scots loon read the report and addressed by employing another 2m more public setcor workers and putting up their salaries. I keep pointed out that GB has guaranted that public sector workers will not got a fraction of their expected pension.

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Hard to draw a comparison.

Outside of wars, the UK has never really committed itself to large scale, unfunded pension commitments to a large number of individuals. previously, most UK borrowing was between other countries and large banks/commercial borrowing.

The pension commitments only started cranking up the 70s when it started become very obvious that life-expectancies started to go up a very rapid rate (in actuarial/demographic rates).

The private sector was cuahgt out by the same thing - except the private sector was a lot better funded.

Few percentages off the real expected return, and few more years on the expected lifetime and - poof! - your pension commitments become a massive burden.

Off course, that one-eyed scots loon read the report and addressed by employing another 2m more public setcor workers and putting up their salaries. I keep pointed out that GB has guaranted that public sector workers will not got a fraction of their expected pension.

Can't disagree, uncharted waters.

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I'm paying into the NHS pension, and even with the recent changes (the new 2015 pension scheme started in April) it's still quite decent.

For the first 10 years of my NHS employment I've been on the 1995 pension scheme. There has recently been an option to change it to the 2008 pension scheme.

The 1995 scheme pays out at 60. If you take it at 60 you can't keep paying into the 2015 scheme. if you go on working past 60 you an continue paying into the 2015 pension, but not the 1995 one.

But if you switch from the 1995 scheme to the 2008 scheme you can keep adding to the pension until you retire (at 65 / 6 / 7 / 8...)

I was just wondering if anyone has been through this choice themselves? I've been on the phone to NHS Pensions, but all they can say is that if you're planning to work later the 2008 scheme works out better. But I don't even know if there'll be an NHS by then.

I'd be interested to hear any HPCers thoughts :)

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I'm paying into the NHS pension, and even with the recent changes (the new 2015 pension scheme started in April) it's still quite decent.

For the first 10 years of my NHS employment I've been on the 1995 pension scheme. There has recently been an option to change it to the 2008 pension scheme.

The 1995 scheme pays out at 60. If you take it at 60 you can't keep paying into the 2015 scheme. if you go on working past 60 you an continue paying into the 2015 pension, but not the 1995 one.

But if you switch from the 1995 scheme to the 2008 scheme you can keep adding to the pension until you retire (at 65 / 6 / 7 / 8...)

I was just wondering if anyone has been through this choice themselves? I've been on the phone to NHS Pensions, but all they can say is that if you're planning to work later the 2008 scheme works out better. But I don't even know if there'll be an NHS by then.

I'd be interested to hear any HPCers thoughts :)

Kind of backs my point up that these contracts cannot be changed retrospectively. Indeed the NHS have gone beyond that, they could have changed the terms immediately and just safeguarded past contributions; they haven't, the contract continues until you hit 60.

I think I should balance my previous points by saying the country receives advantages from final salary annuitants. In a country with a paucity of retirement savings it probably is a good thing that we have a few super wealthy retirees, ex public sector. Indeed my business could not have operated without these wealthy individuals, they are my best clients and I am grateful for that. Also these individuals disqualify themselves from all the goodies on offer to other retirees like the minimum income guarantee, available to people that haven't even worked.

What annoys us in the private sector, is not the fact that these people exist, but they then complain and loosely start bandying about the A word on BBC Question Time.

Guess why the Tories won the election, because the silent majority who get nothing from the public sector were getting a bit fed up with Labour also bandying about the austerity word and promising the moon for those already doing pretty well.

Edited by crashmonitor

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