Notional Service

B

Bonus

Guest
I am buying back 10 yrs Notional service since Jan 2008 with a view to retiring at 60.
I assumed that the deduction would be calculated over a period of 10 yr but the HR letter states that it will terminate in Jan 2027 (19 yrs) @ 13.3% of net pensionable remuneration & 1.8% of pensionable remuneration.

Can you clarify is this correct ?


Also. I am divorced with 3 Children aged 23,19 & 18 what benefit if any, will they gain from my pension if I die after retirement age ?

Hope this is clear.
B.
 
Purchase will end at your 60th birthday.

The amount paid depends on your case so we can't answer if it's correct.

Your youngest child will be 36 on your retirement so won't benefit from your death in retirement!
 
Thanks for that.
Need to give some thought on the cost of the notional service.
 
10 years of missing service would be expensive.

1 year costs about 25-35% of gross pay.

You can pay by one single lump-sum, or by periodic contributions until retirement.
 
Allow me to re-phrase myself.

Buying 10 yrs of notional service may be good value. (or may not be a good idea.)


But it will definitely cost a lot, e.g. possible 300% - 350% of gross pay, less tax relief.

Whether it's a good idea or n ot is a different question.
 
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