Numpty Final Salary Pension Calc

[Pondlife]

In an effort to understand what all the fuss is about, I did a little looky to work out how much a final salary pension would cost to pay for privately.

Assume a 25y/o public sector chappie works the 40 years to get their full 40/60ths final salary pension and retires at 65 with no lump sum. If they were now on 30K and their pay rises at the same rate as the pension fund investments (assumption I've made about the calculator so maybe bollux), in today's terms their final salary income would be 20K (this equates to £55K in the future money) and their monthly contribution would need to be 18.6% of salary (or £465).

Calculator used is here

Is this logic correct? Or am I missing something?

Is the value of a final salary pension equivalent to circa 19% extra?

I'm asking in General as it's not a serious question.

Ta

[Fred Bloggs]

Probably worth much more as civil service pensions are indexed linked. Very unlikely that any person saving up in their own pension pot would be able to afford the contributions to get anywhere near that kind of benefit in retirement these days even if they tried.

[DimPrawn]

How much would you need to save to buy a public sector pension? – Telegraph Blogs

Basically, you'd need to pay in about 30% of your earning all of your working life to match the teachers pension pot. They pay in 6.4% by the way and the tax payer pays the rest.

[Old Greg]

Most public sector is /80, not /60. I think. My NHS one is (I think). Civil service may be /60 but their pay has always been lower than other areas of the public sector (at least that has always been the case between DH and NHS). Sorry that's all ab it vague.

[TestMangler]

Most public sector is /80, not /60. I think. My NHS one is (I think). Civil service may be /60 but their pay has always been lower than other areas of the public sector (at least that has always been the case between DH and NHS). Sorry that's all ab it vague.

Back in a previous life, my Civil Service scheme (although non contributory) was 40/80. Some other public sector workers had 30/60 but I never came across anyone with 40/60.

On the point of index linking, Civil Service pensions when I was there (left '94) were not index linked during your working life. They were based on final salary, which is, in a way index linked, as your salary would rise annually by the negotiated rate and your pension was a fraction of that, depending on service length. They were, however, index linked from the point of retirement.

When i retire i've got about £2500 of CS pension to look forward to Should just about cover road tax on a 4x4 by then