A question about pensions - not sure if I have made the right decision

[changeyourname11111]

Hi :)

I am 53 and have no pension to speak of - I spent 13 years looking after my dc when they were younger, and since going back to work have had tiny pensions due to changing jobs quite a lot and working in places where just the basic workplace pension was on offer.

However for almost two years now I have been working as support staff in a secondary school which is part of the Local Government Pension Scheme and I have joined that - in August it will be two years that I have been part of that.

My job is quite stressful and at the peak of the stress a couple of weeks ago, I applied to various other jobs in other schools, and was offered one of the jobs.

I have now turned it down however as I realised that their defined contribution pension scheme was not as good as mine.

However - have I made a mistake? This other job was very appealing in lots of ways and I love learning new things and adapting to new environments.

My LGPS pension is currently tiny but I was thinking that if I stay in schools for a few more years, or transferred somewhere like the NHS where I could bring my pension with me, it will be worth something extra and worth it even if small - that was my thinking when I said no to this new job.

It feels strange to stay somewhere I don't completely want to stay because of the pension and now I feel a bit sad about my choice. But I guess there would have been sadness either way - both choices involve loss.

My other question is regarding the state pension and LGPS - if you have the latter do you lose some of the former? I am confused about this - is this something that happened for a bit but no longer happens?

Thanks a lot!

Thanks for all the further messages and I am glad other people are also benefiting from the thread.

In answer to some questions - yes I am definitely sure that I have the 35 years of state pension contributions. Actually maybe that was the only question someone asked me.

Also - yes I can absolutely see @NannyGythaOgg how £200 a month would make all the difference.

I had a look at my LGPS pension yesterday. I joined on 17th August 2020 - and on 31 March 2021 my pension so far accrued was about £314. However that statement was sent in August 2021. Is this how it works - every August I will get a statement that relates back to the previous end of March?

So in this case was the £314 based on half a year's salary?

I started my job on £25,000 and at some point in the year went up to £27,000 - can't remember when. (This academic year I started on 28.5K, went up to 29K in December 2021 and am due to go up to 30K in September 2022).

Another question - if I were to leave my job after the two year vesting period (so after August 17th 2022), then let's say two years later get a job with the NHS - would I be able to transfer my deferred LGPS pension even though no payments had been going in for two years?

I am so used to leaving jobs every two years, and I have found aspects of my current job so stressful that I am finding the idea of carrying on with it beyond August really hard. And I am also wondering if the people who made me the job offer would still have me if I went back and asked them (I realise they might not in which case the decision would be made for me).

The idea was that I do one or two more years in schools and then try to get a counselling job with the NHS (I am studying counselling) - so would it be the end of the world if I did a couple of years at this school with a defined contribution scheme and then hopefully got a job with the NHS - and then transferred my LGPS deferred benefits to that?

(I realise no one can really answer this question but just asking for opinions).

Also - it might seem so rushed - but my job operates on a cycle and really the only time to hand in my resignation without causing my school problems trying to recruit someone new is now.

@EmilyBolton Agreed! I was just trying to provide a comparison with the £60 a week OP said she could get from staying a few years in her current job. The only equivalent in DC (guaranteed weekly amount for life) is to buy an annuity.

100% intend on doing drawdown myself.

I think there needs to be so much more done around pension education, especially now DB schemes are basically extinct outside the public sector.

You should get a statement each August that will tell you how much you had accrued at the end of the previous March. That statement should include a breakdown of how the amount accrued was calculated i.e. what pay was used in the calculation and any cost of living increase added on. If you only joined in August 2020 then the amount accrued by March 2021 will have been based on the part year’s pay and you should be able to see this in the statement. The pension is calculated on the actual amount earned during the scheme year (April - March).

Yes, you will be able to transfer your deferred LGPS pension to the NHS even if there is a gap between leaving LGPS and joining NHS. There will be a time limit to do this (usually a year from joining the new employment) so make sure you make a decision in that time as it may not be possible after that.

Note that even if you leave the LGPS with less than 2 years’ service you can still transfer out to a new scheme. If you have less than 2 years’ service you can’t keep a deferred benefit in the LGPS but you can choose to have either a refund of your own personal contributions (less tax) or a transfer value to a new scheme.

Personally I think the LGPS is a fantastic scheme, and there would have to be a significant pay rise to make it worth moving to a new job offering a DC scheme. That’s purely in financial terms though, obviously job satisfaction plays a big part and some people would prefer to move to a job where they will be happier even if the overall financial package is worth less. If you would be planning to move on anyway in a couple of years, personally I would stick with the job offering LGPS and build up as much pension as I could before moving into NHS.

I am definitely sure that I have the 35 years of state pension contributions. Actually maybe that was the only question someone asked me.

It was me that asked this question but it was very much the opposite. The question is have you actually checked your personal SP forecast on gov.uk? The ‘35 years’ is a misconception and does NOT mean you necessarily have a full SP due.

@changeyourname11111 I am NOT an expert but it appears you can transfer your LGPS pension into an NHS one provided the gap between employments is less than 5 years.

Useful links:

www.nhsbsa.nhs.uk/sites/default/files/2018-05/Transfer%20Booklet%20%28V18%29%2005.2018.pdf

And this explains which schemes are in the 'Club' for transfers:

www.civilservicepensionscheme.org.uk/media/wdcj1lmg/public-sector-transfer-club-list-jan-2021.pdf

Even if you don't join another pension scheme or transfer the benefits, whatever pension you've accrued at your leaving date will remain there in the LGPS scheme (so long as it's after the 2 years).

@Chewbecca Everyone should check their entitlement on here. Takes 10 minutes and so important.

I stayed in my company for 30 years. I could have taken a healthy redundancy package about 17 years in and gone somewhere else. I choose to stay for 2 reasons
first was because I had teenage kids and was carer for ex so effectively single parent - I needed flexibility. I had a reputation with company that I was committed and had “banked” many hours of time with them over years. Literally no one would have dared question me for saying I needed to leave early, or take morning off for personal commitments
Second reason was my DB pension…no other company would have paid me the equivalent salary it would cost me to accrue same benefits as a DC.

yep, could have got higher salary or more interesting role somewhere else..but those 2 things were my priority

I retired when I was 55. It allowed me to focus on carer role and was a massive stress relief. I don’t think I could have worked till I was 60, let alone 67 ( my state pension age). I had terrible menopause and was suffering with depression and anxiety and high blood pressure. I think I was slowly killing myself. I have literally no regrets at all that I sacrificed job opportunities elsewhere for my pension. I am happier, healthier and have a very fulfilling retirement

Yes I meant to say that I have checked my statement - long before starting this thread.

Sorry that was in answer to @Chewbecca.

@EmilyBolton and @lifesnotaspectatorsport thank you very much for your thoughts.

It may be too late to go back to the offer in any case, and that job would have been the unknown. Plus I would permanently be aware that I had taken a drop in pension to be there.

It is just that I feel a sense of dread at the thought of having to do my own job even for another year. Parts of it make me very anxious. Plus during parts of the year it is very lonely. It would have been a similar job at the other school but it is smaller and I think the role there is better integrated and supported.

And @ChessieFL thank so much

thanks

This. Pay extra into your LGPS so you get the tax relief. I paid into it and the NHS scheme and, trust me, it was well worthwhile.

My own story of LGPS. I started contributions at age 50 part-time, term time only. My pension contribution for 15 years was c. £50 a month. Am now about to claim it and my pension will be c.3k a year. This represents a good investment to me and only wish I had put more in or transferred another small pension in before I stopped working last year.

Hi OP, I work for an LGPS fund. If you have any questions let me know :)

You may also be able to 'transfer' in all your DC pensions within the first year of joining the LGPS if you move to another employer that offers the pension. You need to check and take advice though which would involve getting forecasts from all the pension providers and the LGPS would then give you a comparative if you moved the pot in.
That should then boost your final pension from the LGPS but of course you would no longer have all the bitty pensions.
But the IMPORTANT thing is to take advice.