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Should I transfer my USS pension to my civil service scheme or my Pension Bee pension scheme?

24 March 2021

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Question by Sue

Hello, I’m 55 years of age and will shortly join the Civil Service Alpha pension scheme. I have £50k from my USS pension. Should I transfer this to my civil service scheme or my Pension Bee pension scheme?

Finally, if my salary is £60k with the the civil service what is my pension likely to be?

Many thanks, Sue


Answered by Phil Billingham

Taking your points in order:

Firstly, I’m unsure what the £50 000 from the USS scheme means?

Is this a £50 000 ‘Cash Equivalent Transfer Value’ – CETV?

If yes, then you really need to get this analysed by a competent IFA in order to see if this transfer is in your best interests. Spoiler alert - it’s very probably not

That would be the first part of the process. The second part would to get a quote from the Civil Service scheme to determine how much extra pension ‘Extra Years’ this transfer would buy you. This would then need comparison with both the USS Scheme and the option to simply transfer to your own private scheme, or, indeed, the ‘Pension Bee’ pension.

In all, this would probably cost £3 000 or more in fees, that is likely to result in you leaving the money where it is.

The Civil Service scheme is fairly complex, and based on average pensionable income, so the answer here is that it sort of depends. It’s worth contacting the pensions team to get a meaningful figure. But if it helps, this scheme accrues 2.32% of pensionable earnings for each year worked. So 10 years’ service, ignoring pay rises, would give a pension of around £14 000 per annum, index linked

Answered by

Phil Billingham

Director

I have been an Adviser, Planner, writer, trainer and business consultant since 1982.