Public sector vs high pay city job

[Vixen44]

I've just been offered a civil service job. It's outside London on £50k. I'm also far in the interview process for a similar role in a financial services company in the city which I'm guessing would be £90k (plus potentially a bonus).

It's a significant difference in money but then trade off with longer hours, 4 days in the office vs 2 and I'm scared about the stress level. I calculated living in a commutable distance (I.e. door to door under 1hour) to the city one would be £1000 more in rent.

I have two young kids (age 2 and 4). So I don't want to be completely absent. DH is self employed and works from home so he is around. But he would need to scale back his work somewhat to do the drop offs and pickups.

I don't know if I'm crazy to pass on the higher paid job?
I know on the flip side that the civil service pension is good but I'm struggling to calculate how much difference that actually makes in the long term.

There are so many factors to consider. Where outside London for £50k? Would you be able to afford to buy a house there? What value do you put on school sports days/plays/assemblies. Can you live comfortably on £50k?

Look at the pensions as well as salaries . The civil service pension is likely to be much better…

I’ve just noticed you’d have to move and pay £1000 more a month in rent. You’d need to earn £18000 more gross to pay for that alone plus your additional commuting costs

You need to put the figures into ChatGPT to work out what your overall financial package is because your pension will be doing some heavy lifting. £50k is SEO I assume? I’m assuming you’re joining with some good experience behind you? I joined as an SEO and got to G6 within a few years.

Honestly I wouldn’t trade the flexibility and support I have in the CS for anything, not even £40,000 (not that it’ll be that much with all considered). And my kids are much older than yours.

Finance jobs in the private sector tend to be very high stress, redundancies are cyclical and you will trally earn every penny. In a nutshelll it’s pretty brutal

Look at both jobs post tax& NI and commute costs. The difference won’t be much and it will be worth the flexibility and low stress.

I did do a budget. And because my husband would be likely working less for the childcare, the net pay increase overall would be small. However I guess it would have better bonus options as well as future pay trajectory.

I'm struggling to calculate what the difference would be at the end. I've put it in to ChatGPT and it says the CS pension would still be wildly better but not sure I trust Chat!

Ok - so £40k more after tax is £24k more.

£12k will be lost on extra rent.
£2k on lost child benefit.
£? On husband earning less.
£? on higher commuting costs.
£? on living in a more expensive area so everything is more expensive. (I am always horrified when I go out for lunch where my brother lives - a Diet Coke costs how much?!?!)

So unlikely you will be better off at this point.

What sort of bonus are you looking at? If that is enormous then might be worth it.

Career development? Presumably better with the London job?

Is the civil service pension still defined benefit? I have a feeling it is but career average? if so then it is “decent but not crazily so”. What is the other company offering?

Personally I would go for the civil service job. But that probably tells you more about me than it does about what is the right decision for you. We moved North in our mid-late 20s for cheaper house prices and less commute. It came with lower salaries but we were still better off as a result. No regrets but I suspect 19 year old me would be very disappointed in 46 year old me!

This is really faulty thinking as surely she will still be about £800-£1k extra up each month and she doesn't need to buy diet cokes or whatever, unless she wants to.

I'd go for the bigger job personally.

on 50k your net is 40k
on 90k your net is 62k
on 100k (inc bonus) your net is 68k

anything above £100k is false economy as you start paying 60% tax as you lose personal allowance

so max loss is £28k per year, I can’t say how much of that you’d lose to additional childcare/husband pay/commute/rent/other conveniences to keep things going…

it’s not an insignificant amount but any career gains you aim for can only be had if you then go on to similar high paying/stressful jobs. With such young kids that would be hard in the near future.

the other option is to take the city job for a calculated stint of 2-3 years and then go to a low stress job using this pay to launch you to a better pay.

Have you considered what difference something like compressed hours would make to your life - family time, mental health, and finances (childcare and commute costs)? In my experience this is common in CS, many people work all sorts of patterns as the contract is usually 35hrs or so, so fairly easy to compress to a 4-day week without reducing hours/pay.

The few people I know in financial services or similar industries all work 4-day weeks but on reduced hours, not compressed, so that’s a 20% pay cut right away if the FS role you’re applying for is similar.

I made a move from a higher paying role to a CS role doing compressed hours - it’s much better for me and my family. The work-life balance I have now, compared to my last role, is incredible, and to do 4 days in my last job would have had to be on reduced hours. That job was very stressful and affected my health significantly, which is worth considering anyway but especially when you have also got small children to deal with.

You could take the CS job for a few years and build up some pension, utilise the flexibility, and then go for a city job later - it’s not a now or never scenario, is it?

Last point I’d make is that CS jobs often involve a long screening period, so you could accept and begin that without withdrawing from the FS interview process, if you want to see if you would be successful. Maybe not 100% ethical but it’s an important decision to make and might be easier if you know the outcome of the FS one too. Easy decision if you don’t get it! Hope it works out either way.

Difficult decision.
Personally I'd go for the job in the finance company. Often the perks are better - loans at preferential rates which might give you substantial benefits. Ask about BUPA too, big companies have staff schemes.
Work is stressful whatever, especially if you're the type who gives 100+ percent, so I'd go the whole hog to earn the maximum.
However, other posters have a point about calculating carefully.

I would normally say take the finance role. The significantly higher earnings over a lifetime would dwarf a civil service pension scheme.

However, it will bring you very close to the 100K tax cliff edge at a time where you would lose the childcare benefit as your children are young. You should consider how quickly you could break the 125K barrier in the finance role otherwise it is a lot of hard work (and voluntary pension contributions) in tax purgatory.

What a stupid disincentive by successive governments to private endeavour. Yeah, you might want to work for the government instead.

DH has what you describe as the better paying finance job and during busy periods like end of year prep, he is often working until 1am.

I'd say that working till 1 am only during busy periods is really not that bad for a city finance job.

Some people are more suited for the private sector and accept that the trade off for financial gain is the imposition on domestic life. Others have a more civil service mentality.

If working till 1 am on a occasional and even relatively predictable basis (end of year) fills you with horror, OP, the finance job is not for you.

Well it depends on your personal circumstances. Our kids are similar age to OP’s and it’s not great for any of us. All depends on what else you have going on.

CS generally pays 27% pension and you pay about 5.5%. 37 hours is full time. Most departments are 60% in the office now but if they’ve said 40% that’s great. You will still need to be commutable though.

Tricky choice, however, I would go for the higher paid city job as I think it would be a better career move overall (that’s assuming you’re career minded). Your DC are little and this is when you can use childcare for longer hours and don’t have hobbies to cart them to and teenager stuff going on! This is assuming the city job has good perks (I work for a large city corporate and the perks such as health insurance are excellent). I do see what people are saying and I’ve never worked for the civil service but I wish I had been more ambitious when my DC were that kind of age as I’m playing catch up now

Okay, the Civil Service Alpha defined benefit scheme (the current one), accrues at 2.32% a year, which would be £1160 a year if you're on £50,000. You would contribute 5.45% of your pre-tax salary, so £2725. If you worked there 25 years, you would accrue a pension benefit of £29000 (haven't included salary increases).

I don't know the employer contributions of the private sector offer you have, but let's say you contribute the same sum, £2725 and your employer puts in 5% (£4500), so £7225 annual contributions, at a compunded growth rate of 6% annually, after 25 years, you'd have a pot of £398,924. At today's rates, a basic annuity adjusted for RPI inflation each year, that pot would buy you an annual income of £16487.

I’m in my 20s and made a similar transition, leaving the CS.

However both jobs paid more than yours, and I didn’t need to relocate or increase living costs. (Plus you don’t actually have an offer from the private sector company so this whole discussion could be moot!)

For me it came down to the culture. I wasted my 20s working in government because the culture is slow, inefficient, stagnating. It’s where careers go to die frankly, colleagues were so negative, jaded and bitter. Just putting in 10% of effort makes you an overachiever in government as everyone else is slacking off for the pension.

So it depends on you and where you see yourself. But I personally felt I had more to give, more to achieve and a higher ceiling to my earnings.

Also, not all civil service roles are blissful and idyllic in terms of work life balance. It’s a civil service department (DWP) that gets taken to employment tribunal the most out of any other uk employer. They also lose the most employment tribunal cases too.

So it’s not the case that across the board, you will get an easy experience. The issues with DWP aren’t unique to DWP but rather a symptom of the inept culture that exists in CS as a whole.

Civil service pension is high - 28.9% employer contributions whilst at 50k you would contribute 5.45%. Downside it's linked to state pension age so you get hammered taking it early (roughly lose 5% per year early) so many use AVCs to avoid this.

Many civil servants also Dept hop after a while - similar roles but some dept pay more then they go back to original dept at a higher pay or higher grade.

I would say the stress level depends on the role and Dept but the flexibility is good.

You can’t make a decision based on guessing what the salary for the city job is.

What happens at 125k?