Most public servants will retire with a reasonably good pension, if they have a good number of years service & finish on a reasonably good pay grade.
But would it actually be worth paying into say an AVC aswell to top up your pension income?
For example, a public servant retiring with the full 40 years at age 60 on 90K/yr will receive an annual pension of 45K and a once off, tax-free lump sum of 135K.
Any additonal contributions to a private AVC would earn 41% tax relief.
The fund may rise a small bit over its duration
(from last night's show private pensions have only risen 1% per annum on average over the past 10 years - not sure if this 1% growth is after factoring in the management fees, etc or not, but I'd say not!)
But upon retirement, I don't think there would be any tax-free lump sum possible from their private pension pot (as you received your public service pension lump sum tax-free - I'm open to correction on this!)
And you will also likely be paying 41% on your annual pension income due to the 45K public servant pension putting you over the threshold.
So I don't see there being any benefit in an AVC for public servants if they have a good number of years service & finish on a reasonably good pay grade.
But would it actually be worth paying into say an AVC aswell to top up your pension income?
For example, a public servant retiring with the full 40 years at age 60 on 90K/yr will receive an annual pension of 45K and a once off, tax-free lump sum of 135K.
Any additonal contributions to a private AVC would earn 41% tax relief.
The fund may rise a small bit over its duration
(from last night's show private pensions have only risen 1% per annum on average over the past 10 years - not sure if this 1% growth is after factoring in the management fees, etc or not, but I'd say not!)
But upon retirement, I don't think there would be any tax-free lump sum possible from their private pension pot (as you received your public service pension lump sum tax-free - I'm open to correction on this!)
And you will also likely be paying 41% on your annual pension income due to the 45K public servant pension putting you over the threshold.
So I don't see there being any benefit in an AVC for public servants if they have a good number of years service & finish on a reasonably good pay grade.