Civil service pensions are given to individuals who work in the public sector to help them save for the future.
But, unlike most other pension schemes today, civil service pensions operate differently and provide a different pensionable income than workplace pensions in the private sector.
Here’s everything you need to know about how civil service pensions work.
What are civil service pensions?
Civil service pensions help individuals working in public sector bodies save for the future.
But unlike many other pension schemes, civil service schemes are defined benefit pensions, and guarantee an income to individuals based on their final salary and years of service.
Defined contribution pensions, on the other hand, are much more common in the private sector.
Over time, you and your employer will make contributions to a pension scheme. These contributions are then invested, meaning that the value of your final pension will be dependent on these contributions and the returns the pension funds have returned.
As they guarantee a minimum income, and are subsequently much rarer today, defined benefit pensions such as those in the civil service are seen as more attractive pension schemes.
Civil service pensions have undergone various reforms, with five types of civil service pension now in service, depending on when you joined the civil service.
These are called:
How do civil service pensions work?
When you join the civil service, you will automatically be enrolled into the civil service alpha pension scheme, which became the default scheme for individuals in April 2015.
Compared to the previous pension schemes, the alpha pension has a higher pensionable age — the age at which you can start to draw on these savings — and is slightly less generous than previous schemes.
As you work for the civil service, you and your employer will make contributions to your pension, with the majority to be made by your employer.
As civil service pensions are defined benefit schemes, the longer you work for the civil service, the more valuable your pension becomes.
Then, once you reach pensionable age, you will be able to draw on your civil service pension and will receive a guaranteed level of income.
What is the Civil Service Partnership scheme?
When you enrol in the civil service, you will be given the choice to enrol in the alpha scheme or the Civil Service Partnership.
This is a defined contribution pension scheme, meaning that you and your employer make automatic contributions to a pension scheme which is invested as part of a pension pot, and will see your savings accumulate over time based on the returns that your savings have earned. This is an alternative to the defined benefit scheme.
What are your civil service pension contributions?
Over time, you and your employer will make contributions to your civil service pension.
The member contribution thresholds until 31 March 2023 are:
£0 – £23,100: 4.60 per cent
£23,101 – £56,000: 5.45 per cent
£56,001 – £150,000: 7.35 per cent
£150,001+: 8.05 per cent
Your employer’s contributions, until 31 March 2023, are:
£0 – £23,000: 26.6 per cent
£23,101 – £45,500: 27.1 per cent
£45,501 – £77,000: 27.9 per cent
£77,001+: 30.3 per cent
What happens to your pension when you die?
One of the benefits of civil service pensions is that when you die, a significant proportion of your pension will be passed on to your descendants, although the details of this policy vary depending on which pension policy you are on.
As a general rule, however, should you die during service, your beneficiaries will receive a lump sum of between two and three months’ worth of pensionable pay, as well as a percentage of your pension.
The exact amount of the final pension you will receive is calculated differently, depending on your scheme.
If you die having already taken your pension, your beneficiaries will still receive a proportion of your pension.
In most cases, if you die within five years of taking your pension, your beneficiaries will receive a lump sum, usually equivalent to the remainder of the first five years of the pension you were due to receive.
Your beneficiaries will also receive a percentage of your pension beyond this.
What happens to my pension if I take a career break?
If you decide to leave the civil service for a time, your pension will remain untouched, and you won’t have to make any further contributions while you aren’t working for the civil service.
In this regard, your civil service pension is similar to other workplace pensions in that your money is tied up with your job in the service and will remain there until you decide to draw on it or transfer it.
Find out more about what to consider when taking a career break here.
How can I contact the civil service?
If you have any questions about your pension, you can contact the civil service pensions service online, by emailing general enquiries to [email protected], or by ringing 0300 1236666.
You can also write to the civil service pensions scheme by addressing any correspondence to:
Civil Service Pensions
PO Box 2017
Planning for your retirement isn’t always easy.
Whether you need help with your civil service pensions, or any other pensions, speaking to an independent financial adviser can make things easier.
Find your next financial adviser with Unbiased.