is the nhs pension good

Each year has an inflationary factor(s) applied to it up until the point of retirement. The government can continue to do this at will. I am a part time worker (30 hours) but pay as if I am full time (so 14.5%). If the employer didn’t make the contribution then you would get nothing like a 1/54th scheme probably a 1/108th scheme….if you were lucky!! You can then choose to leave/freeze/defer the 2015 scheme benefits until your state pension age of 67. Alyson. It would most advantageous for you to consider talking to a financial adviser who will be able to talk through your best plan of action. Conservative governments have consistently undermined the schemes and, with no effective opposition, they could be in power for the next 10 years or more. This seems counter-intuitive and I am assuming that you are unlikely to follow this course of action. The two are different and this will, in the main, be down to the fact that your taxable pay is lower because of the pension contributions you make. Benefits such as the Ill Health Retirement Pension, Life Cover (death in service), and uplifts for the spouse’s pension. I think that the article shows that, in its current format, it is. My partner has a very large NHS pension worth over 1 million which he is currently drawing. Pension every month Earnings can and do vary from those given. You then receive 1/54 of each year’s pensionable pay for each year in the scheme. Thank you. I am 49 and want to stay in the NHS until retirement age. That I am planning that will be aprox 40000£/year. Necessary cookies are absolutely essential for the website to function properly. Every year’s allocated pension is then added up to give a cumulative amount. It might just interfere with my aim.’, Have you felt like Clint Eastwood recently? Based on this assumption additional retirement provision is typically a good thing. Is there a way add the new service to the old one. I’d recommend seeing an adviser to discuss your future aspirations, familial situation, income requirement, health etc etc. Any help is appreciated! Hi The kind of deal you get when you retire will depend on when you joined the scheme. The same can be said for the lifetime allowance. I’m a nurse with my pension split between the 1995 scheme and 2015. I wanted to check something that I’ve been told please. From what I understand, my ‘pot’ only gets 1/52nd of my annual salary each year (so £961.54) but I’m paying more than that in just two months’ worth of contributions. Thanks for your comments. I am 56yrs 5 months and have 18 years in the 1995 pension, I am due to go into the 2015 pension in October 2020 (tapered protection re my age). I am confused after endless research online re the 1995 versus 2015 NHS pension. A NHS Pension Scheme year runs from 1 April of one year to 31 March of the following year. I am tempted to leave the scheme and put my £800 per month into overpaying my mortgage. How is this worth me remaining in the scheme. Everyone in the NHS has to pay towards a pension. She unfortunately is ill informed about her pension, mainly due to working permanent nights for her whole career. Hi. I remained in 1995 scheme and I understand my official pension age is 60. Greg. Meaning that you actually could have been a member of the 1995 pension scheme to the age of 53/54. Your deemed pension contribution needs to be added back into the calculation, so you may find it higher than you anticipate. We'll assume you're ok with this, but you can opt-out if you wish. CET (Cash equivalent transfer) is not allowed with NHS pension scheme benefits. Owen, Thank you so much for your response. Many thanks. Is that correct? I’ve just started working part time for the NHS Professionals. As a 40% tax payer you should complete a tax return every year, up until the point HMRC may send you a letter stating you no longer need to complete a return because your situation seems to be the same every year. hi Assuming that you continue along the consultant pathway you could expect a pension of at age 67 to be around the £100k+ mark. I would like to purchase additional pension, but am not sure if I can purchase additional pension for the 95 section? b. With NHS Pension Scheme contributions as high as 14.5% of pay for some, penalties of up to 5% per year if you want to take benefits ‘early’ at 60, and possible tax charges if your NHS Pension causes you to breach your annual or lifetime allowances, that’s a question you could easily be forgiven for asking. The added years are a percentage of earnings. I hope this answers your question. The increase in pension contribution of £90pm represents quite a chunk of this additional income as you say. I hope that helps. However, that has also taken my gross salary just £100 over the upper limit for 5.6% contributions, so I now pay 7.1%. I am joining the NHS pension and would like to transfer my current pension pot estimate in £56.000 to the NHS one. There are standard contribution rates for NHS employees joining the NHS pension scheme. The NHS Pension Scheme is a defined benefit public service pension scheme, which operates on a pay-as-you-go basis. I understand that at State Pension age, I would then start receiving the money due from the 2005 scheme on top of the 1995 payments. Or just to get max returns on what you contributed, you are forced to work till you perish! The NHS Pension provides other benefits, so these need to be taken into account. The new scheme attracts large penalties if withdrawn at 60. Your examples rely on the protagonist’s income being the same or increasing during their time saving into the NHS pension schemes. Thank you for your comment and I am sorry to hear that you feel let down by the NHS pensions agency. From 1st April 2011 the increases have been linked to the consumer price index (CPI). I am in the middle of a divorce. As I always assumed I could only claim this at state pension age I feel let down for not being told that I could claim it at 60. I would advise you to get your latest TRS statement – that will inform you of what your current benefits are. The recent court case brought against the government and the transitioning of NHS pension members from the 1995 pension scheme, to the 2105 pension scheme may mean, for you, that effectively you could have/should have remained a member of the 1995 pension scheme. I think NHS Pension scheme is value for money for anyone earning less than £47845 (9.3% employee contributions), for everyone else it is useless – because you will need to draw pension for atleast 14.6 years (from age 68) to even get back all the cumulative contributions (both employee and employer contributions). It is worth rejoining the pension scheme, whenever you are able, in my opinion, on account of the fact that the NHS employer is deemed to make a contribution to your pension of 14.39% (currently). I am now a Consultant and my contributions to the added years are hefty – doubled since being a ‘junior doctor’ in August. For the 2015 Pension Scheme, your retirement benefits will be reduced if you draw your NHS Pension before your State Pension Age. The main reason is that the benefits accrued, even if you retire early at 61-62, will still be significant, non-investment linked and offer other benefits like indexation, spouse/partner pension, dependants pension, etc. Andrew provides trusted independent financial advice to doctors and dentists in Wales. The NHS pension has been revised, so more recent members may receive less generous benefits than before. Could I also ask you to comment on the extra years contracts that many people will have? What happens to my NHS pension? It is mandatory to procure user consent prior to running these cookies on your website. The NHS pension is more generous than most private sector pensions. I am 43. i stayed in the 95 section for 10 years, and was moved to the 2015 section. I work in maintenance and there are rumours we will be privatised next april. You can get an idea of how much you will receive as a pension by getting your Total Rewards Statement. hat you omit is that pensions rules have changed several times in a few years. Regards, It's important to know what the benefits are and what you are entitled too, particularly if you are thinking about, or are already in the 2015 NHS Pensions scheme (for dentists who are working in England and … Hi I just feel it is unfair to contribute so much towards the pension, when you have big debts to pay off when you are younger( mortgage, children’s education etc), when you can only enjoy the returns when you are senile, provided you have not burnt yourself out. I am a part time salaried GP earning £40000 a year, although I contribute 13.5%( I think it is based on full time equivalent). I really think you would benefit from talking to a financial adviser, these are big decisions. Can I suggest that you see one of our advisers. If I decide to take my pension now, about 8 months before my official retire date – would I incur significant financial penalties affecting my pension payout? value is the value placed on your NHS Pension Scheme benefits by HMRC and is calculated by multiplying your pension by 20 and adding the value of any lump sum. The first big difference between your current job and the NHS job is the type of pension on offer, and who bears the risks associated with each type of pension. Presumably (although not stated and I can’t get them to confirm this) I have already lost out on 3 years of payments as I am 63 (this week!). This process is applied to each year of pensionable income. I am currently 40yrs. If you work on the basis that part of your earnings should be put aside for retirement provision, then the NHS pension is a good environment. However, as I have said, you are potentially making decisions that I feel would be best made with the involvement of a financial adviser. Realistically your looking at £38000, with a promotion of this being part-time for childcare reasons, give us an example like that! Thanks. In my experience deferred benefits don’t seem to increase on the TRS by anything other than the applicable salary increase. If you work part-time you still make contributions to the scheme and still build up benefits. On average, contributions are about 7% (good … How much I will get if I opt-out? It turns out quite a lot actually! Kind regards c. And if its still worthy to be in the pension given that I plan to retire early. The personal pension is more flexible and can provide benefits from any age after 55 (being increased in coming years). Your contribution varies depending on the amount you earn (income is “banded” and a contribution made dependent on the banding – the more you earn, the more you will contribute, up to a maximum of 14.5%). I must be misunderstanding this all somehow. However, you can commute (exchange) income in favour of a bigger lump sum. To provide an equivalent pension at age 65, you would have to pay 43.3% of your basic pay that year into a personal pension. Hi. The government essentially incentivises individuals to save for their retirement by offering tax relief (at their highest notional rate of income tax) on pension contributions. Richard. Your question is fairly complex and I would encourage you to meet one of our advisers to discuss it in person. Assuming I could get a job with at least an inflationary/cost of living increase in the private sector, at which point will it not be worth staying for pension or how do I evaluate that? The added years questions is more difficult and should be reviewed on an individual basis. In the private sector, the minimum an employer can contribute into a pension is 3%. If you leave the pension scheme then these benefits will be preserved/deferred until your retirement date, at which time you can expect them to be paid to you. Best regards. The Reformed Scheme. The NHS pension is a “Defined Benefit” or DB pension. I would need to check your calculations regarding your income. Recent changes to pension legislation means that you need to be careful when looking to invest in a pension. However, things to consider include: – Firstly, the pension will be available to you before 68 – probably from the age of 58. The question arises, what is the most appropriate vehicle to give you the opportunity to retire early? The value of any tax relief available will depend upon the individual circumstances of the taxpayer. Read more Close, Specialist Financial Advisers to Doctors and Dentists, © Legal & Medical Investments Ltd 2018 - All rights reserved Legal & Medical Investments Ltd, Splatford Barton, Kennford, Exeter EX6 7XY. guaranteed NHS pension at retirement is payable according to a fixed formula. Benefits in the scheme are worked out on a final salary basis and members receive a pension based on their membership and final pensionable pay. My question is I was looking at purchasing additional NHS pension and will I only be able to receive this according to my 2015 retirement age without accruing any losses. The initial change to the scheme was made to new joiners in 2008, by the then Labour government and offered as an option to those already in the scheme. I am now 52 and wish to retire in less than 3 years time when I reach 55 years old. Recently I checked my total pension value which was £760,000. Can I demand to have it backdated? There are some that it is not right for, but they are few and far between. I am due to retire in 15 years, but my NHS pensionable pay is now very low as i mainly see private patients. You also won’t be making any pension contributions which is another factor that increases your overall income. These cookies will be stored in your browser only with your consent. With this in mind, it’s certainly worth considering joining. In other words you are actually only paying 60% of this amount? As you rightly say, you would “miss out” on seven years of contributions to the 2015 scheme. The best way of establishing future benefits is to look at your Total Rewards Statement and extrapolate from there. 2) probably I come back to do locum shifts from time to time. I have 15 years in the 1995 scheme and will do 25 years of the 2015 scheme which means I plan to retire at 62. Are you referring to the fact that you could contribute to a personal pension plan instead? Then if I stop paying into the 2015 pension; but not cash it till the state pension age. If we go back to the 2008 NHS pension scheme, with its generous system without having to use career average earnings it looks pretty good – so what’s not to like? I’m now 44. I am assuming that you have been out of the NHS for more than 5 years and don’t intend on re-joining. I understand that a significant amount of money is going into the NHS pension, especially as a GP partner. Your pension contributions “buy” pension entitlement that won’t be “lost” whether you are in the UK or not. You don’t “add” service together, as such, you accrue service under each section of the pension scheme. My initial feeling is that you will have very little in the way of ‘a pension shortfall’ as a consequence, so, therefore, there may be little reason to sign up for additional pension. The “actual” cost to you will be 80% of this amount ie £145pm. However, your 1995 scheme pension benefits are based on WTE so this seems a fair exchange. Firstly, don’t forget that you pay 12.5% gross but receive 40% tax relief on the pension contribution so the actual contribution is 7.5%. Hi everyone, so I'm an IMG working in the UK and I've started to look into the NHS pension scheme to see if it is worth staying with or opting out. As you allude to – a penalty will be imposed if benefits are taken before the normal retirement age. I do not feel that you should be concerned about losing the money that you have paid in. I have paid into NHS pension in the lat 10 years ( 4 years as self employed, rest as employed). I suppose you can’t really comment too much on individual cases without all the figures but, in general terms, does that seem a sensible plan? This process would continue until retirement and is applicable to each individual year’s earnings. As you can imagine it is very difficult to give advice without knowing a persons full financial background. I earn 50k (aged 28 with 7 years NHS pension contributions). I’m 45 years old, a doctor working in NHS for five years but opted not to be in the pension scheme. Now, I’m earning around £65000 a year and I am just in a position to do monthly payments regularly but would like some advice about better to opt in to nhs pension scheme or continue out and pay my private pension. This is a CARE (career average revalued earnings) scheme that has an accrual rate of 1/54. “Freezing the pension lifetime allowance is a bad decision and is creating the perfect storm, forcing an exhausted workforce – many of which are already planning to work fewer hours – to make some very tough decisions such as working less hours or leaving the NHS … The earliest you will be able to claim benefits from your pension scheme will be 57/58. If you take your 2015 scheme benefits at age 60 then you will suffer an actuarial reduction which will be significant. As I am now approaching retirement age (65 and 5 months) I wrote to NHS Scotland for a pension forecast. You have nothing to lose by making the enquiry, but I don’t think that they are obliged to back date the payments. Hello Susan, I have recently been told by a more senior member of staff that those in the 2015 scheme will only be able to claim their NHS pension when they reach the state pension age. It sounds to me like you may be of an age that makes you a member of the 1995 scheme and potentially, also the 2015 scheme. is the nhs pension good value? If you are a member of the NHS Pension Scheme, you can find details of the scheme on the NHS Pensions website or call the members helpline on 0300 3301 346. This means that it’s NOT like your typical “pension pot” scheme (those are called “Defined Contribution” or DC pensions ). However, the employer will make contributions to it but I’m not sure at what level. I have a £200,000 pot in the old 1995 scheme and a smaller £17,000 pot in the 2015 scheme. The majority of scheme members should ignore all of the background noise and remain in the Pension Scheme. The starting point is to apply to the NHS to find out what they will give you. I have been a member of NHS pension (2008 section) since Oct’2012 ( with contribution of 5.7%) and now in 2015 section. Who’s to say they will stop making unilateral changes with no meaningful negotiations? Without it, there is no way the benefits would be what they are. Hi, I am not a UK resident but I’ve started working as a part time locum on the NHS. You could take that course of action. While NHS Pensions are being more flexible now than in the past over belated ‘scheme pays’ elections where there is a good excuse for having missed the deadline, this should not be relied upon. (approx.).. NHS Pension Scheme (Scotland) 2015 I was TUPE’d over to a private company in July 2013 hence my pay frozen at 2013/14 pay for (band 8A (£47,800 plus 6k higher cost London allowance). You would be best advised to decide on how much pension you want to buy/how much you want to spend to buy additional pension, and then make a comparison against a personal pension. at the moment. 1 year’s NHS Pension contribution will give you an NHS Pension of £1,920.91 per annum (index linked) at age 65. How much is my projected lumpsum Hi, Is this true? Hi there, I am an IT Engineer who has recently joined the NHS with a yearly salary of £26565, currently in the 2015 pension. For example Year 1 (2017) – if the revaluation is 2%, this factor is added at the end of year. I will be doing 2-3 months a year with an annual earning of 40-50,000 pounds. Your eventual pension is based on your career earnings. I am paid much less than the contract value and my principal has now decided to reduce the amount of superannuation that I get even though I won’t be working less hours. A simplistic way of looking at this which I wouldn’t necessarily advocate is to look at the likely increase in annual income that you stand to gain for an input of £75,000 and decide whether you are likely to get that much back over the coming years. You have to measure these “immediate” increases against your willingness (or not) to NOT taking the ‘95 pension benefits, continuing to contribute to the 2015 scheme and increasing future benefits. Is there a risk that the retirement age will continue to be increased? If your intention is to boost your savings in order to help provide in retirement, then a MPAVC is a consideration, but there are many other options. Your planned retirement age is 68 (state pension age). Sorry if I am being really dense here. Can you help me workout roughly what I can expect to earn from my NHS pension if I plan continue along the traditional path to become a consultant and retire between 65-68? However, if you retire “early” (pre-age 67/68) there will be an actuarial reduction and benefits will be reduced accordingly.

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