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Public Sector - buying back years

  • 22-12-2015 8:53pm
    #1
    Hannaho
    Registered Users, Registered Users 2 Posts: 733 ✭✭✭


    Hi! I will be 50 next birthday and have missed out a lot of years of my public sector pension due to working in the U.K. and then taking years out for childcare. Although I broke my service - I was in the public sector before 2004 - 2002/03 and paid some contributions, so can retire at 60. They have given me a cost of e240k for buying back 20 years. I have two rental properties - one of which I am going to sell as I hate being a landlord, and was going to invest this money in buying back my service. However, my family has an history of a particular type of genetic cancer - so may not live to utilise my pension. Other from that i own my own house outright. If I use the money from the sale of the property, I will also have 100k to put my children through college in 4 years time. I work full-time currently, but can't see myself working beyond 60 as I also have an autoimmune disorder which affects my energy levels. I have also bought back 16 years of my English State pension and will continue to contribute to it yearly. Does anyone think I'm mad doing this. Would my children still qualify for dependent's pensions (no spouse). What if I bought back the service but had to retire on ill-health grounds down the road? A financial adviser I saw thought buying back years was very bad value - I can't see how it is if I live until even early 70s. I'm very inexperienced in pensions area and would appreciate some advice.


Comments

  • #2
    fits
    Registered Users, Registered Users 2 Posts: 13,771 ✭✭✭✭fits


    If you keep the 240k and draw just 12,000 from it a year, it will keep you going until you are 80, without even taking interest into account. how much extra would you stand to get if you bought back service? It would be taxed as well.

    (I don't know much about these things either)


  • #3
    3DataModem
    Registered Users, Registered Users 2 Posts: 4,077 ✭✭✭3DataModem


    If your health is seriously impaired then buying back years (or buying any kind if annuity) is probably not advisable.


  • #4
    bmm
    Registered Users, Registered Users 2 Posts: 912 ✭✭✭bmm


    You will also have Capital Gains Tax when you sell your rental property.

    A tax consultant may be able to help crunch the numbers for you.

    Lots of similar stuff on askaboutmoney.com


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