My pension is worth NOTHING

[RosieBright]

I had a job for 13 years in Government and kept thinking it was a great pension as folk kept telling me. I looked at my pension paperwork when the annual statement came through and I have £9000.
I thought that was A YEAR!!! But no, it's worth about £30 a month 😱
How can I boost this? I need anoth £100K to even have half a decent pension

Help!!!

What they put in is not relevant here. It's their salary and their working hours that matter to check if the numbers stack up.

Pretty sure you've misinterpreted the figure. You need to log on to Civil Service Pensions to see the forecast. You have another six years to work so make sure you're full time and take any promotion/TP opportunities that come your way.

There is the option to take a smaller yearly pension and have a lump sum.

NRTFT so apologies if this has already been mentioned but the administration of the pensions has recently moved to Capita who have completed screwed it up.

So if the figures seem completely out, could that be it?

Alpha is 2.32% of your yearly salary. So if you earned £30k per year, that would be an input of £696 annual pension (ignore your contributions). £696 x 13 is £9,048. This is your pension PER YEAR.

So assuming your salary was around £30k, then pension of £9k per year sounds about right.

If it's Civil Service you worked for and you've looked online at the Civil Service Pension website note there is an issue with the new pension portal since the contract switched to Capita last November. There are multiple problems with different/wrong figures being displayed, payments being delayed, previous years annual benefit statements not available to view yet. The unions have escalated and it's been raised in Parliament as the whole thing has been a disaster. So you can't rely on anything showing on there.

You still get a tax free lump sum

Civil service/LGPS never give you the 'pension pot' amount. They give you what you will get over year. Call them up and recheck.

You've misunderstood. These schemes you accrue a pension of the 1/49th each year. So if you earn £49000 you earn a pension of £1000 per year, so if you had done 9 years it would be a pension of 9,000 per year every year of retirement provided you didn't go early etc.

i imagine there is also a lump sum in addition, which is equal to a multiple of the annual pension. That is true for the University pension which is done on a similar basis.

Does it still build after you’ve left?

I have a pension that will pay me just under £9000 pa (if I don’t take a lump sum) and that is from a private sector job I left twenty year’s ago, was there 8 or 9 years on a final salary of about £16k pa. Which seems a lot better than the calculation above, which if I did correctly, would have only given me approx just under £3k pa for a gov job, same salary and length of service.

Is it that private work pensions are just much better than public sector? 3 times the amount in this case.

Not always. Certainly with LGPS the baseline is the monthly amount with the option to exchange some annual pension for a lump sum. There is also the option to do AVCs to use for a lump sum but it is not the default option.

Yes it is recalculated each year and increases with inflation.
Generally public sector are much better now as it is very rare to get a DB pension in the private sector.

In Alpha you can take a tax free lump sum which is based on a notional pot which I think is 20x annual pension, but doing so reduces your annual pension by a factor of 12 (so for every £12 of lump sum you lose £1 of annual pension - eg if you have accrued an annual pension of £10k you could take a £50k lump sum, but doing so would reduce your annual pension to £5833). It's not possible to take a lump sum without reducing the annual amount.

In practice this is poor value for someone with normal life expectancy so a lot of people don't take the tax free lump sum at all.

I agree that it's likely to mean £9K per annum. You are also presumably eligible for a state pension which means your overall situation is probably way better than you think. Don't panic until you have more information.

I'm ex local government Op. Just ring the pensions people, they will advise you. For what it's worth I don't think it will be £30 per month with your service. I think you're probably on the averange salary scheme as well, but why not just speak to the people who know?

This is really relevant to the problem the OP is facing. CS pensions currently in complete meltdown.

I was in a final salary scheme 1999 to 2012, that worth about £10k a year in today's money. Another one from 1988 to 1995. That worth £7k in today's money per year.

Op there is an issue with the pension provider since it moved over to the new one last year. Lots of information is incorrect and many of us can't even log on. You won't get through to the helpdesk but if your retirement is imminent then you should speak with your hr. If not we all just need to wait for updates, it's ridiculous.

Is my calculation right that I am getting three times more from a private sector job than if it had been govt? Sorry, I don’t expect you to double check my calculations or anything, it just seems if the OP’s £9k is not her yearly pension payout after 13 yrs of employment, it just seems very very small. (Even a pension I have from junior position (5.5 years employed) I left 40 year’s ago gives me over £300 a month).

I think the public pensions being amazing is a farce tbh.
im only 37 and have been working in the nhs 15 years and my pension is nothing despite paying a big chunk of my salary each month. I know I’ve got a long time left compound interest etc but colleagues retiring now on better pensions than me say they’re still crap 🤷🏼‍♀️

That seems much more realistic than OP’s interpretation of her pension. She simply can’t be forecast to get so little.

As pp says, it'll be £9k a year. You can stop panicking @RosieBright .

I honestly thought public sector were laughing all the way to the bank come pension time. Glad I worked in private sector.

I did the calculations for NHS pension upthread. It accumulates at 1/54 of salary so if you earned £54K in a year then you earned a pension of £1K per year from state retirement age. If you earned £27K in a year then you earned a pension of £500 per year etc Average life expectancy at retirement is about twenty years so basically the NHS pension is worth about 40% on top of your salary.