It is never too early to save extra for retirement, and AFPS15 makes it easy for you to improve your pension by purchasing Added Pension. So each day this week we give you answers to some common questions about the Added Pension provision under AFPS15.
Today’s question is…
Q. Is there a limit?
A. Yes – £6,500 is the total overall amount of Added Pension that may be purchased. However, that would cost between £80K and £120K!
Q. “Between £80K and £120K” sounds a bit imprecise. Why so?
A. What a contribution will buy depends upon other factors, not only what is to be enhanced. Other things that can make a difference to the cost are the member’s age when the contribution is made, his or her State Pension Age and whether the contribution is by lump sum or by monthly instalments. It also makes a difference whether you enter into the contract at the beginning of the contract year or part way through. The last time I looked at the Added Pension cost factors, there were over a dozen assumption tables!
Check back tomorrow for the next question in this Q&A series