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A Day and the AFPS

I was having a heated debate with my brother (He is an actuary) at the w/e about public and private sector pensions.

One thing that we both agreed on was that I was a lucky chap to have such a good pension scheme, BUT, the only guarantee the scheme will be there as it stands in 30 years (when I am collecting the money), is the Government.

As with everything in life, nothing is a certainty, and there could be circumstances when the Government fails to meet the promises it has made to us, don't forgot we are small (200,000 of us Regs) in comparison with the NHS (1,000,000+). The government is accruing huge un-funded liabilities which we and our children will have to pay.

What struck me was the fact that we should be learning not to rely on the HMG to sort us out….. and A Day is one those chances. Under the new rules, even though we are in a Final Salary Scheme, we are allowed another pension plan. You can contribute either: £2808 pa if you earn less than £30,000 or irrespective of your earnings using the formula below…

Your Annual Salary minus [the annual increase in the members accrued pension over the previous year*, multiplied 10]

*i.e. the difference in pension on the 6 Apr 05 and 6 Apr 06.
The bonus of this is that anything in a Pension is exempt from means testing if you fall on hard-times and you get Tax relief on your contributions.

This is genuine, based upon www.opas.org.uk and telecoms with the HMRC.

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