Buying Back Years - Teacher

[daithid2000]

Hi,

Just wondering if any one had any advice on buying back years on a secondary school pension. Aged 42. Career break and parental leave of about 6 years, means I have only around 10 years of pension contributions so far.
I was thinking that buying back a number of years, as the defined benefit aspect of the pension is fairly valuable, and more secure than AVCs (or is this not the way to think about it?).

Also, there is a chance I may not stay in the public service sector until retirement. I read somewhere that buying back years would only be beneficial if I stay in the public service until retirement. I don't understand this part though, as surely if they years are bought they will be counted as part of the preserved benefit when I reach retirement age?

Thanks in advance

 

[Early Riser]

Also, there is a chance I may not stay in the public service sector until retirement. I read somewhere that buying back years would only be beneficial if I stay in the public service until retirement. I don't understand this part though, as surely if they years are bought they will be counted as part of the preserved benefit when I reach retirement age?

If, for example, you were to subscribe to purchase 8 notional years by way of salary deduction now, the cost would be spread over 23 years (until age 65). If you left after 11.5 years you would have paid for half this amount - 4 years. As you say, this would be counted as a part of your preserved benefit. If, on the other hand, you paid by lump sum now, the whole 8 years would be preserved.

I was thinking that buying back a number of years, as the defined benefit aspect of the pension is fairly valuable, and more secure than AVCs (or is this not the way to think about it?).

They each have their pros and cons. If your primary aim is to increase your guaranteed annual pension throughout retirement then the notional years is probably the way to go. If your aim is to build up a more flexible retirement fund you should consider AVCs. This Information Bookley may be of help:

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