I’ve really found the information provided by the service on the Alpha pension almost impenetrable!!

That's a forlorn hope.

SpaceGazelle wrote:

They do it on purpose. Financial sector speak is designed in the hope you won't notice they're all a bunch of cunts.

Think this one’s more of a case of it being classic Civil Service ‘Mandarin’, rather than trying to trip anyone up! In terms of accrual it’s a pretty simple scheme, you pay in either 4.6%, 5.45% or 7.35% (depending if you earn up to £34,199, £34,200 to £56,000 and £56,000+) and in return you get 2.32% of your annual salary added to a balance that you’ll claim at state pension age.

There is an annual adjustment to that balance based on inflation, but ignoring that (and assuming there’s no changes to your salary in the whole period) to demonstrate incredibly simply if you earned £35,000 a year you’d pay in just under £160pcm (salary / 12 * 0.0545) and in return would have £812 added to your balance (salary * 0.0232) - do that for thirty years, and you’ve got a balance of £24,360 that you’ll get every year from state pension age…

Say you worked like that for thirty years from 30, had a state pension age of 68 but wanted to claim at 60 you’d have an actuarial reduction of 0.648, ie you’d get 64.8% of your total…£15,785 a year from 60 years old, but with the added benefit of getting that for eight years early.

If you live to 85 that’s 25 years of £15,785 (£394,625) rather than 17 years of £24,360 had you waited to claim it at 68 (total of £414,120).

Details of actuarial reductions for alpha are here: https://www.civilservicepensionscheme.org.uk/media/oislhmme/early-and-late-retirement-factors-and-guidance-alpha.pdf

lastant wrote:

SpaceGazelle wrote:

They do it on purpose. Financial sector speak is designed in the hope you won't notice they're all a bunch of cunts.

Think this one’s more of a case of it being classic Civil Service ‘Mandarin’, rather than trying to trip anyone up! In terms of accrual it’s a pretty simple scheme, you pay in either 4.6%, 5.45% or 7.35% (depending if you earn up to £34,199, £34,200 to £56,000 and £56,000+) and in return you get 2.32% of your annual salary added to a balance that you’ll claim at state pension age. There is an annual adjustment to that balance based on inflation, but ignoring that to demonstrate incredibly simply (and assuming there’s no changes to your salary in the whole period) if you earned £35,000 a year you’d pay in just under £160pcm (salary / 12 * 0.0535) and in return would have £812 added to your balance (salary * 0.0232) - do that for thirty years, and you’ve got a balance of £24,360 that you’ll get every year from state pension age… Say you worked like that for thirty years from 30, had a state pension age of 68 but wanted to claim at 60 you’d have an actuarial reduction of 0.648, ie you’d get 64.8% of your total…£15,785 a year from 60 years old, but with the added benefit of getting that for eight years early. If you live to 85 that’s 25 years of £15,785 (£394,625) rather than 17 years of £24,360 had you waited to claim it at 68 (total of £414,120). Details of actuarial reductions for alpha are here: https://www.civilservicepensionscheme.org.uk/media/oislhmme/early-and-late-retirement-factors-and-guidance-alpha.pdf

I was going to complain about the lack of tables but then I clicked and tbf the important stuff is.

lastant wrote:

SpaceGazelle wrote:

They do it on purpose. Financial sector speak is designed in the hope you won't notice they're all a bunch of cunts.

Think this one’s more of a case of it being classic Civil Service ‘Mandarin’, rather than trying to trip anyone up! In terms of accrual it’s a pretty simple scheme, you pay in either 4.6%, 5.45% or 7.35% (depending if you earn up to £34,199, £34,200 to £56,000 and £56,000+) and in return you get 2.32% of your annual salary added to a balance that you’ll claim at state pension age. There is an annual adjustment to that balance based on inflation, but ignoring that (and assuming there’s no changes to your salary in the whole period) to demonstrate incredibly simply if you earned £35,000 a year you’d pay in just under £160pcm (salary / 12 * 0.0545) and in return would have £812 added to your balance (salary * 0.0232) - do that for thirty years, and you’ve got a balance of £24,360 that you’ll get every year from state pension age… Say you worked like that for thirty years from 30, had a state pension age of 68 but wanted to claim at 60 you’d have an actuarial reduction of 0.648, ie you’d get 64.8% of your total…£15,785 a year from 60 years old, but with the added benefit of getting that for eight years early. If you live to 85 that’s 25 years of £15,785 (£394,625) rather than 17 years of £24,360 had you waited to claim it at 68 (total of £414,120). Details of actuarial reductions for alpha are here: https://www.civilservicepensionscheme.org.uk/media/oislhmme/early-and-late-retirement-factors-and-guidance-alpha.pdf

Nice one!!

I understood how the pot grew, but the early retirement bit really threw me.

"Ah sure it'll be grand"

They've only recently been talking about mandatory pensions.

This kinda stuff would be kept quiet from the masses and you'd be expected to pay someone stupid money to set anything up.

I'll have to do some research.

So I need to change off Fidelity apparently. I'm trying to figure out how much they're actually taking from me but I can't quite work it out from the app.

Will switch to Vanguard once I get confirmation if I'm getting a pay rise this year and throw a bit more in. How complicated is it to switch? Do Vanguard sort this out for me?


Edit - I've got a regular savings plan so I think it's 0.35% per month for the Fidelity bill.

This is the way but you have to check every few years that you're on the cheapest and if it's worth switching. They can do broadband type deals in the hope you'll forget to switch but it's no biggie once you've done it a couple of times.

How much are Fidelity going up for a regular saver?

Usually yes, depends on the investment structure, but almost certainly the shares will be held as USD value, so if the GBP weakens against the USD you gain even more, a minor currency investment in way. Works both ways obvs. But investment in funds can be opaque in how it works, better to ask your fund manager

GooberTheHat wrote:

Probably a stupid question, but is my investment in a UBS S&P 500 Index Fund C Accumulation insulated against drops in value of the £? Given that the value is the US companies, my presumption is that if the value of the £ false the £ value of my shares in the fund will go up?

This is a something I've been wondering myself. I'd assumed that since contributions to my fund are in GBP, then I'm getting less dollars for my £ over time when buying (assuming that USD continues to gain over GBP), but this is offset by gains when selling again. I guess at the point you buy into a fund, it doesn't really matter how many $ you are getting. It only matters whether there is a +/- shift at the point you sell. So, if we assume that GBP will continue to decline against USD over the long term, then it's even more reason to keep buying into a US fund.

This article explains things well...

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/how-it-works/how-currency-movements-affect-your-returns

The S & P 500 fund I use is "VANGUARD FUNDS PLC S&P 500 UCITS ETF USD(GBP) (VUSA)", so I'm assuming that means that the market I am buying into is USD, but the underlying fund currency is GBP (because it's a UK based fund). However, on reading the investor doc for this fund it says based currency is USD. Hmmmm.

It's down a couple of % in pre-market so far. Does this indicate anything?

The bell's at 2:30 right? I hope something exciting happens. Up, down, whatever. Goes to show how important Nvidia is to the S&P 500 and the American economy in general. Viva la revolution. Or it might just plod on.

Shadow of the Erdtree gameplay reveal trailer at 2:30, get your priorities straight.

Seeing quite a few big swings down now.

SpaceGazelle wrote:

Not sure what time the Nvidia earnings report is due.

An hour after the market closes today, 10pm our time.