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Old 24th Feb 2019, 18:49
  #6007 (permalink)  
Join Date: Jan 2019
Location: Surrey
Posts: 95
Originally Posted by Large Dave View Post
I’ve been reading this thread with interest as it serves to sum up the situation in the UK presently in the airlines which generate the biggest career earnings. It seems to me these are limited to BA, VS, and the low-cost A320/737 operations which have quick commands or DEC.

I think a factor not discussed here is pension contributions.

The bigger your pension pot the sooner you can retire, or more desirably for most, accept the smaller income of going part-time.

The value of pension contributions markedly decreases with one’s age. Firstly, because contributions made later in life will be invested for less time before retirement, but also because the closer to retirement, the less risky investments one can afford to make.

For illustration (not reliable figures, not pension advice, do your own research)- consider 1000 invested at age 35 vs at age 50, with retirement planned at 60.

1,000 over 25 years mainly in equities then into bonds/cash towards the end, let’s say returns 4% above inflation on average. So you hit 60 and that 1,000 is worth 2,666.

Your 1,000 at 50 is going to be straight into bonds/cash, so let’s say that returns 2% above inflation. It’s worth 1,219 when you reach 60.

The figures are speculative and generalised but the point is money saved earlier in life is far more valuable.

With these savings, the pilot who earns more earlier can afford to retire or go part-time sooner.

A question to consider is would you prefer to spend the end of your career at a lo-co dropped down to 50% having banked the cash already, or be on a 900/750hr BA/VS long haul roster for your whole time, with both having the same retirement outcome.
Completely agree, though I would add that the lower company contributions at the LoCo (50 % less in some cases) results in a lower company contribution even on a command salary, compared to a year 1 FO at BA.

(7% of 108k = 7560, 15.1% of 58k = 8758)

Obviously you can top up the pension contributions yourself but perhaps slightly misleading to suggest that the pension will be bigger at some LoCos vs BA.


EDIT: counter to my own argument to keep things equal... obviously there’s the mortgage to pay off too, which would clearly be cleared faster earning more at an earlier point in the career. Do the savings made here equate to the extra pension / higher end salary? Probably have to hire an accountant for that!
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