NHS Pension (Sorry)

If you are looking to put the money into a different pension, I doubt you will find one that's better.
If you think you can invest the £165 and achieve better returns (property,shares etc.) then have a go
The other option is to spend the money and hope you don't live beyond retirement age.

I'm in my forties and I am under no illusion that the age I get my NHS pension will be before 75.

Let me try and help from my perspective.

I'm retired now after 40+ years as a pension consultant advising companies on all aspects of company sponsored pension plans. During this period I dealt with 100s of companies, mostly UK subsidiaries of USA parent companies, and met 1000s of employees to discuss their personal aspirations in their future. Usually, because of the time I was working, the pension schemes were of the final salary type. In addition, I have been an advisor for The Pensions Advisory Service(TPAS)since 1991 dealing with pension scheme members' problems and individual formal complaints. TPAS is a quango so 100% of their work and advice is free to whoever seeks it. I'm not employed so I give my time to TPAS for free. I'm a pensioner after being in good quality final salary schemes all my working life. This means I'm in a reasonably good place and I can provide my views, particularly to those younger aged, regarding their pension decisions.

Generally speaking, my view is that if anyone has access to a final salary scheme they should participate, no hesitation. The cost to you plus the company contribution and all the benefits is too good to miss. You may think you can replicate them yourself but you'd be seriously pushed to do so. It is easy to be sidelined into doing alternative other things with the equivalent of your contributions...such as paying extra amounts towards a mortgage as you indicate....investing in property, whatever. The thing is that all these have their own risks. The really important thing is to make provision for income in your later years from as early a date as possible. It's just too easy to postpone the decision in favour of nice "NOW" things like holidays, new car, new house, etc. Children have a priority too. However, sooner or later, pension provision will arise and you'll need to do something and the later you start the harder it is to accumulate sufficient resources. So often I've seen people leave things far too late and their expectations are beyond them financially, such a shame.

Your in the NHS Pension Scheme, which is possiby in the top 10% of excellent UK final salary schemes. It's easy for me to say, but in my view you'd be pushed to spend your money more wisely. The only real risk is the political one: successive governments will find it increasingly difficult to expect UK tax payers to finance super pensions for public sector employees. Public sector employees think they are underpaid by comparison to the private sector and deserve better pensions. The pay issue is myth: generally, public sector employees are paid better than they realise but their unions make sure they don't know that for the sake of the union's publicity etc.

Via TPAS I have a good understanding of the regulations that govern the NHS Pension Scheme, as well as its good points and where it sometimes fails, particularly on the administration/management side, but overall it's fine.

So, stick with it would be my view. This is not my advice because I cannot give advice, of course.

Maybe my views will be challnged by certain "anticipated PHers" whose view are contrary to mine, which I respect, but at least I'll stick with mine! Easy do do so in my reasonable situation!

R.

Put simply, previously you were getting a benefit worth about 3 or 4 times what you paid in. Under the new terms your benefit will be 2.5 to 3 times what you pay in.

Still sounds good to me - I'd swap!!


Sidicks

Is that likely??

Maybe you'll only get 2 to 2.5 times what your own contributions would have funded - isn't that still pretty amazing?!

I can hope!

It's quite likely that I will continue to go up, which means over my career I will be getting less; but I see what you're both saying - I'll stick with it! I'm only 28, and have paid in for 4 years now.

is it average over the whole work term or just the last 10 years? I thought the latter?

Also consider the pension contribution is not taxed so the actual cost to you is more like £120 per month.

I am glad to hear you're sticking with it.

Your NHS employer is currently having to contribute (over and above what they pay you) 14% of your salary towards your pension so you would have to be crazy to leave!

As a GP principle I am having to pay both the employee and employer contribution (almost 25% of my pay) towards the NHS pension scheme and I have not quit the scheme yet.

It just goes to show that I know nothing about pensions!

Is there any (simple) way to calculate what I get back, and when? I'm in the 2008 scheme, so I believe I don't get the initial lump sum.

Th time for accumulation of contributions is less and the pension will be paid for longer, so 5% reduction seems generous!!

Retiring at age 55 will mean that you'll have your pension accrued up that time based on salary and service history etc, less a reduction factor for early payment. The reduction factor will be around 50% ie 5% per year early. You'll get the smaller pension paid for the additional 10 years, of course.

In an earlier post you asked about calculating your future pension. The NHS Pensions Scheme is administered by NHS Pensions and you could ask them for a pension forcast. It is likely to be based on current pay plus past and future service...still, it'll give you a rough idea. I've always found NHS Pensions easy to deal with.

R.