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longtomsilver

Anecdotal, Police ? Pension.

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I've come back from my first parent/child afterschool soft play activity at my children's new school.

One of the fathers was there, a police officer, actually a top bloke. We got onto the discussion if the police pension. He got quite animated when he told me he had opted out of the Police Pension scheme only a few months back. He has 12 years of preserved rights and has decided that a 13% salary contribution for a defined pension benefit and that the retirement age being pushed back from 55 to 60 is no longer enough of an incentive.

There is clearly a massive mistrust in public sector pensions and a fringe benefit of this is that they will be less of a burden to future tax payers (isn't something like half of police budgets being spent on retired officers pensions, much higher that the 30% of council tax that goes to local government staff).

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There's a similar situation in the NHS. The old final salary at 60 scheme for all was clearly unsustainable and so it's now career-average at 68. The sting is that there's no distinction between non-clinical (mostly office based working office hours) and clinical (the opposite) staff. I could handle working until 68 if I was just doing 9 - 5 at a desk, but not with my current work.

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has decided that a 13% salary contribution for a defined pension benefit and that the retirement age being pushed back from 55 to 60 is no longer enough of an incentive.

That may well be a mistake. A defined contribution pension with those benefits could easily cost 40-50% of salary. I'm doing 40% and will be lucky to get half my current income in retirement.

If he is a top rate tax payer, his effective EMTR may well be above 60% (assuming he gets child benefit as your post suggests). The more kids, the higher that EMTR and less point taking the money now.

Some quick numbers for him. These are very rough, ignoring many of things but I find it useful to understand the magnitude of the problem:

Age 60, live to 88 => Need 28 years of pension income.

Want 50% of working salary => Need to save 14 years of current income.

Contribution of 13% => 40 year working life => saved only 5.2 years worth of income.

So given up 5.2 years of income to get 14. Good deal.

In my case, I'm aiming for that 15 years of current gross income in a pension by age 60. I'm saving 40% of gross to do it.

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I could handle working until 68 if I was just doing 9 - 5 at a desk, but not with my current work.

I'm certain clinical work is very demanding. But have you ever actually done a 9-5 office grind? Ever heard the phrase used 'the living dead'?

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My girl friend is teacher and she as said she wont be teaching when after 55. Does not think she will be able to cope with kids,

I work in the IT world and is is doubtful that i will be bale to working near retirement age as might not be able to cope with future stuff.

I do have pension scheme but that is invested in tfse which as dropped from 7000 to just above 6000 this year.

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My girl friend is teacher and she as said she wont be teaching when after 55. Does not think she will be able to cope with kids,

I work in the IT world and is is doubtful that i will be bale to working near retirement age as might not be able to cope with future stuff.

I do have pension scheme but that is invested in tfse which as dropped from 7000 to just above 6000 this year.

If you're in it for the long term and will continue to contribute into the foreseeable future (I.e. Not planning on retiring within 5 years) then you should be cheering ? lower prices as you'll be buying more units and lowering your average unit cost.

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It's normal to change career as you get older, the idea of doing the same thing your whole life is rather old fashioned. Plenty of jobs suit the wisdom, experience and cooler head of an over 50 year old.

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If you're in it for the long term and will continue to contribute into the foreseeable future (I.e. Not planning on retiring within 5 years) then you should be cheering lower prices as you'll be buying more units and lowering your average unit cost.

yep i understand that. but am wreslting with idea pay of mortgage as quick as possible instead of pay in to pension while rates are low.

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I'm certain clinical work is very demanding. But have you ever actually done a 9-5 office grind? Ever heard the phrase used 'the living dead'?

Yes, and I found it draining through sheer lack of fulfilment.

There's definitely problem with what to do with people who are too old for their jobs but not too old for work. Should they be pensioned off (expensive), pushed out (cheaper, but not good for morale for the remaining workforce) or moved sideways into something more suitable (sounds good, but relies on there being useful work for them to do)? Personally I'm going to face the second option by default in due course unless I can think up a worthwhile third option for myself.

The OP's copper acquaintance is right to be sceptical of public sector pensions as they amount to a generous promise from a highly unreliable debtor, but he sounds like he hasn't really thought through what his life will be like when he's in his fifties.

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I know of a copper who came out of the pension so he could continue to finance a lifestyle that he cannot afford,the £300 ish quid he now does not put away is now going on the payments of a prestige car,cant wait to see what happens when he is 60!! he already got 40K of unsecured debt!!

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