Top 10 jobs for pensions

Published by Sam Barrett on 10 December 2007.
Last updated on 13 September 2017

Top 10 jobs for pensions

Automatic enrolment means that most of us now have access to a workplace pension, with our contributions topped up by those of our employer and the taxman. But even when the total minimum contribution rises to 8% in 2019, it will still leave many of us short in retirement.

While some of us are lucky enough to work for employers that pay in more than the minimum, your choice of career can make a huge difference to the size of your income in retirement.

These are 10 of the top jobs for pension benefits, both in terms of their generosity and their guaranteed longevity. You never know, you might just consider it's worth a career rethink.

1. Politicians


 

They might be responsible for tinkering with our retirement savings but MPs benefit from one of the most generous pension schemes out there. Although a new career average revalued earnings (CARE) scheme was introduced in 2015, they still receive 1/51st of their annual pensionable earnings for each year that they in the scheme, revalued each year by the Consumer Price Index (CPI), in exchange for an annual contribution of 11.09%.  

And giving them more incentive to hang on to their seats, those aged 55 plus on 1st April 2013 can also stay in the final salary scheme, which was in place before the CARE scheme, for as long as they remain an MP.

Typical retirement income:
Based on the current salary of £76,011, a 57-year old, who serves as an MP between 2005 and 2025, can look forward to an annual pension of around £34,000 if they retire at age 65.

2. Armed forces


 

Although pension benefits for armed forces personnel have been reduced in recent years, members of the current scheme, AFPS 2015, still enjoy one of the most generous schemes in the public sector. 

It's a CARE scheme but it's non-contributory. Instead the Ministry of Defence pays in the equivalent of 1/47th of their annual earnings, with this increased each year to keep pace with inflation.

Normal retirement age is 60, although members can retire from age 55 in exchange for a reduced pension.

Typical retirement income:
A 30-year old army sergeant earning £36,000 today and expecting to retire at 60 as a major after completing 32 years' service, can expect an annual retirement income of around £41,000 and a tax-free lump sum of £22,000.   

3. Town planner


 

Whether you're a town planner or a refuse collector, you'll benefit from membership of the local government pension scheme. It's another CARE scheme, putting 1/49th of your pay into your pension pot each year. This is then revalued every year by CPI to keep pace with inflation.  

To secure this, local authority employees pay in between 5.5% and 12.5% of their income with their employer paying in the balance. As an example, someone earning £40,000 would pay in 6.8% of their income.   

Typical retirement income:
A 40-year-old town planner earning £40,000 can look forward to an annual income of around £29,500 if they retire at age 65.

4. Firefighters


 

Firefighters have had a pension scheme since 1926 but the current one, a CARE scheme, was introduced in 2015. This provides an annual benefit of 1/59.7th of earnings, with this revalued every year to keep pace with inflation.

Contributions depend on salary. For instance, in the 2017/18 tax year, anyone earning less than £27,543, pays in 10.5% of their earnings with this contribution rate rising to 14.5% for those with salaries of £142,501 plus.

Normal retirement age is 60, and there's an option to exchange pension income for a tax-free lump sum of up to 25% of the pension value. The exchange rate is £12 of lump sum for every £1 of income.

Typical retirement income:
A 25-year old firefighter joining the service on £30,000 can expect an annual pension in the region of £20,000 to £29,000 when they retire at age 60, depending on inflation-linked increases.

5. NHS employees


 

Nurses, surgeons and other NHS employees enjoy a CARE scheme. This entitles them to 1/54th of each years' earnings, which is increased at the beginning of each year by CPI plus 1.5%. They can take it all as income or exchange up to 25% of it for a tax-free lump sum on retirement.  

For this, they pay in between 5% and 14.5% of their salary, depending on how much they earn. For instance, at £25,000 a year they'll pay in 7.1%, while at £100,000, it's 13.5%..

Although the benefits have been trimmed back in recent years, it still remains one of the UK's most generous schemes.

Typical retirement income:
A 40 year old senior nurse earning £35,000 a year can expect to retire at age 65, with her 25 years service earning her a pension income of around £14,500. The maximum lump sum she could take would be around £60,000 but this would reduce her annual pension income.

6. Tax inspectors


 

Tax inspectors, as with any member of the civil service, enjoy healthy pension benefits through the Civil Service Pension Scheme.

Anyone joining now will be a member of the alpha scheme, which came into force in April 2015. Another CARE scheme, members have 2.32% of each year's earnings added to their pension, with this increased by CPI every year. This costs between 4.60% and 8.05% of earnings, 

Normal retirement age is the later of age 65 or state pension age, but members can take benefits from age 55, although these will be reduced to reflect this.

Typical retirement income:
A 50-year old tax inspector completing 15 years service on an annual salary of £45,000 can expect to receive a pension of around £13,000 when she retires at age 65.

7. Teachers


 

One of the largest public sector pensions, teachers pay between 7.4% and 11.7% of their salary into this defined benefit scheme, depending on their salary, with their employer paying a further 16.48%.

It's a CARE scheme so each year they accrue benefits worth 1/57th of their pensionable earnings. These accrued benefits are increased each year by inflation, based on CPI, plus 1.6%. There's also an option to convert up to 25% of the pension value into a tax free lump sum on retirement.

Retirement age on this scheme is the later of state pension age or age 65.

Typical retirement income:
A 35 year old teacher earning £40,000 who joined the pension scheme in September 2016 could expect an annual pension of around £46,000 when they retire at age 68. If they took the full 25% tax free lump sum - £200,861 - this would reduce their annual pension to £30,129.

8. Police officers


 

In line with other public sector organisations, the police force replaced its final salary scheme with a CARE scheme in 2015. Although some employees will stay in the old pension, anyone joining the force since April 2015 will be a member of the new scheme.

This entitles them to an annual contribution of 1/55.3th of their earnings, which is revalued each year by CPI plus 1.25%. To receive this, police officers pay in 12.44% if they earn less than £27,000, rising to 13.78% if they're on more than £60,000.

Typical retirement income:
A 30 year old police officer on a salary of £30,000 will receive a pension of around £28,000 if he retires at age 60. If he takes the maximum tax free cash at retirement - £120,000 - this will reduce his annual pension to £18,000.

9. Museum curators


 

Work for one of the UK's publicly funded museums, such as the British Museum, the Tate Gallery or the National Museums of Scotland, and you'll be entitled to a civil service pension.

In exchange for a contribution of between 4.60% and 8.05% of your earnings, you'll be entitled to 2.32% of your income as pension benefit. This will increase each year by the Consumer Price Index.

Typical retirement income:
A museum curator earning £30,000 a year can expect to build up a pension worth around £15,000 after 30 years' service. On £30,000, they'll need to pay in 5.45% of their earnings.

10. School caterers


Like town planners, school caterers are members of the local government pension scheme. For every year they're employed and a member of the scheme, 1/49th of their salary is put in their pension pot, with this revalued by CPI each year.

On a typical salary of £16,000, they would pay a contribution of 5.8% to receive this, with their employer topping up the rest.

Typical retirement income:
As a rough guide, a 35-year-old starting as school caterer on £16,000 can look forward to an annual pension of around £9,500 if they stayed in the same job and retired at age 65. 

Leave a comment

(Please check the armed

(Please check the armed forces sums quoted, is a "£22,000" lump sum an error?)

I am fortunate enough to have one of the 1-10 above "Gold plated" pensions AND a privately funded Self Invested Pension.
Why..? Because I don't trust the government not to default on their pension promise.
The one thing all government pensions have in common (not mentioned in your article) is that they cannot take advantage of the new "pension freedoms" by transferring the government pension, which most other pensioners, such as those with a defined contribution pension can do, to a different product such as a SIPP.
What difference does that make???
Well in the past two years, since I have been retired, my government pension has risen in line with the C.P.I., so a total of around 2%. Whilst my SIPP has risen by a staggering 72%.
I do feel sorry for those who don't appear on your list however, I bet the retired 30 year old sportsmen are kicking themselves and the bankers with their measly pensions must be very embarrassed not to have made it onto the list!

very intresting,as a postal

very intresting,as a postal worker for 34 years and now aged 54,55 in april 2018,it's supriseing what people are due for long service,even tho the goal post are be'ing moved constantly it is possible to retire at 60.but one has to be realistic,get rid of the car,free bus pass in wales,install a wood burner,plenty of free wood about.and if the state pension does not rise yet again people born in the early 60's who have worked full time will be fairly well off.

Your comments surrounding the

Your comments surrounding the police officer pension are not entirely accurate.
It is not just new joiners that join the CARE scheme.
I was transferred across on its implementation date and as such lose a considerable amount of pension. Even more annoyingly colleagues I joined with / around the same time as that were more 'mature' are partially or in some cases fully protected (therefore staying on the 1987 scheme). And whilst we have paid the same in for 30yrs I will have to stay on longer to claim my (reduced) pension.