Public Sector Employee

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Dusty46

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Hi folks

I am looking for advice around my Defined Benefit Public Sector Pension
I joined Public Sector in 2015 - aged 42 - on a salary of 42k
Prior to this i have an Irish life pension working for private sector worth €5k - as i was a stay at home mum for a number of years and living in the UK

Since i have joined the civil service/public sector, have progressed and been promoted through different competitions and Departments and currently on Engineer Grade 1 Salary and my payscale is - 84,937 – 87,605 – 90,279 – 92,945 – 95,611 – 98,782 – 102,391¹ – 106,004

I am Divorced and the maximum pension i will earn through the public sector is 25 years
I am in the 40% tax bracket too - so I am basically looking for advice in either
1. increasing my pension through AVC's OR
2. potentially buying a property to rent out - and any extra income i earn between the mortgage payment and the tenant will be paid into a pension

I have a property worth 700k, and a fixed rate deposit mortgage at 3% due to mature in 2030 - balance is 48k
Its a 4 bed and I rent out a room availing of the 14k tax relief too - which technically i use to pay the mortgage

I also topped up my UK pension as i lived there for 8 years and now have 24 years paid contributions in UK - I will continue to pay this until i have the maximum

My Youngest has another couple of years in college

I have 180k in savings so could use half of this as a 30% deposit in a Buy to let investment

Advice ?
 
Would be better to post this in the Money Makeover forum according to the required format.

Regarding your options with making AVCs and if you wished, buying back additional pension benefits on the Single Pension Scheme, there is some information about this in an answer I posted in thread titled: "Best place for savings, and maximizing public pension" also in that forum.
 
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beautfan said:
As you're after 2013 in the civil service, you're on a defined contribution, not a defined benefit scheme.
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Not so. It is a defined benefit scheme but it is not a final salary scheme:

"The Single Public Service Pension Scheme (“Single Pension Scheme”) started on 1 January 2013. If you joined the Public Service for the first time on or after 1 January 2013 and are working in a pensionable position, this is generally the Pension Scheme that applies to you. Your Scheme is a Public Service Defined Benefit Pension Scheme" https://singlepensionscheme.gov.ie/wp-content/uploads/2017/12/Scheme-Booklet.pdf
 
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Dusty46 said:
increasing my pension through AVC's
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You can of course increase your pension by way of AVCs and benefit from 40% tax relief. But I suspect that the combined UK State pension, the 25/40 (minimum) Irish State pension and your Occupational Pension(s) are likely to bring you up to, or into, the top tax band in retirement also. Its not a reason not to build up an AVC pot but it is a consideration.

In any event you should at least contribute a sufficient amount to an AVC to be able to top up the tax free lump sum to the Revenue allowed limit. If you were just aiming for this it can be done nearer retirement.

But maybe you are considering early retirement as an option (ie, before your scheme's "normal retirement age")? If so an AVC pot could be very advantageous.
 
IMHO, this is enough for anybody in retirement:

Full Irish State Pension
+ full UK State pension
+ PS pension of 25/40 years
+ small Irish Life pension

Personally, with that future income, I wouldn't be in a rush to do AVCs.

Although Ruffian makes a good point, to do AVCs to maximise the tax-free lump-sum.

Or do AVCs, as Ruffian says, if you want to retire early.
 
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