I threw away a final salary pension and feel sick.

[CommanderTaggart]

I was a teacher for 5 years at the start of my career and I had a final salary pension. I then moved to a local government role. I left my teachers pension in its pot, as all I really knew about pensions at the time was that a final salary teachers pension is an amazing thing that I was lucky to have and should hang onto. So I did.
Anyway I am now older, earning a lot more and researching and learning about pensions. I realise to my dismay that if I had transferred my teacher’s pension into my LGPS pot within 12 months of leaving teaching I could have retained the final salary link for those 5 years. Safe to say my final salary is going to be very considerably more than the 30k ish I was on when I left teaching.
I am absolutely kicking myself. I had no idea. It was a huge financial blunder that will cost me dearly in retirement and I just feel that I was in no way prepared for or helped to make this decision. “Seek financial advice” is all people ever say, but realistically when you are young and have no investments and very little in the way of spare cash, seeing a financial advisor is not something that you do.
I’m not sure why I’m posting here really, I just had to vent my huge disappointment and frustration and am seeking commiseration I suppose.

OP assumes the £90 - £100k twenty years from now with two promotions and inflation.

In fairness a £52k salary in 2005 would be worth about £100k. So assuming g a £100k salary 20 years from now isn’t outlandish

Yes, in 25 ish years or so. My manager earns somewhere around £65k now, assuming inflation of 2-3%, and if I am promoted to my line manager’s level, I reckon it might be paid around £100k in 2050. Obviously just a guess 🤷‍♀️

What are you on now? And how old?

@cottonwoolie you can't take a lump sum from LGPS or TPS until the pension comes into payment. And the career average part has no lump sum at all. It was being phased out even before that.

I recommendd Rebel Finance School - lots of helpful info on pensions.

High £50ks, early 40s.

And your manager is only on 6/7k more than you?

I don’t know her exact salary, it’s a conservative estimate. Why is this relevant?

I think local government final salary of £100k is ambitious when in forties and on high £50k and manager on not much more

But twenty years from now - inflation alone could take it up to £100k. That is the point OP was making

I think that inflationary figure is wildly inflated

I suppose no one really knows what inflation will be like over the next twenty years. I suspect there will be some years when it will be higher than 4%.

what inflation are you expecting?

BofE long term inflation target is 2%

There is no 'pot' in public sector schemes. Final salary schemes pay a lump sum which you can increase by surrendering a % of your pension. I'm due an annual pension of about £8000 and a lump sum of £20000. I can choose to reduce my pension to £6000 and the lump sum will increase to about £32000

I do think over the next twenty years inflation will be higher than the Bank of England target of 2% - like it is now.

I don’t think it’s outlandish that OP could be earning. £100k in 2045.

i looked back at the pay scale the job I am in for 2005z. The minimum pay has doubled in those twenty years.

i don’t think it’s wildly inflated to think there could be a similar pattern over the next twenty years.

No self respecting economic forecaster would ever say inflation will be at 2% for the next twenty years. There will inevitably be years where it is much higher.

OP, I have 6 years final salary, giving me £5K plus £15K lump sum, so not sure how yours equates to 10K after 5 years ? Or have I misunderstood? Apologies if so.

Agreed - there will be years when higher than 2%

however I do think £100k in 20-25 years is a little “outlandish” when you’re in your early forties and on late £50k and, quite crucially, your manager is only on £6/7k more than you 🤷‍♀️

What was the min pay in your job in 2005?

Sorry won’t be able to respond as phone off now for no screen before bed!

This! Similar boat, can’t work due to ongoing cancer treatment. Luckily my union rep is on the ball and will guide me through the IHR process.

I won’t give my specific role - but to illustrate -

2005 £31,900

2025 £61,600

or a role maybe similar to OP

2005 £24,800

2025 £47,300

But if your salary was £100k after years of inflation, it wouldn't be "worth" more because inflation causes all costs to rise. If you think you are likely to be promoted then base your estimate on the pension that figure would get you, and how that would stack up against current costs.

Most final salary schemes converted to average salary so it would likely be based on what you earned in that role.

The average salary in the UK has increased by around 70% in the last twenty years.

i appreciate the last is no certain predictor of the future - but a 70% increase would take OP’s pot hefted salary of £65k if she gets promoted to over £100k.

she has said she is currently on high fifties - let’s say £57k. 70% takes close to £100k, even without the promotion.

so I really don’t think it’s outlandish.

It will have risen with CPI. I think you are underestimating that. Its a small % of your total pension, Id not worry about it.