NHS lease scheme
Discussion
I have to admit, I'm stumped with whether NHS leasing is worth it! I've just been promoted to Band 7 and not sure whether I should even look at leasing this way, even for 2-3 years (to prevent pension deductions falling too low in the future).
Can anyone advise accordingly? Would love to lease a Tesla!
Can anyone advise accordingly? Would love to lease a Tesla!
Greywall said:
I have to admit, I'm stumped with whether NHS leasing is worth it! I've just been promoted to Band 7 and not sure whether I should even look at leasing this way, even for 2-3 years (to prevent pension deductions falling too low in the future).
Can anyone advise accordingly? Would love to lease a Tesla!
I'm in a similar position....not going to bother. Can anyone advise accordingly? Would love to lease a Tesla!
Greywall said:
I have to admit, I'm stumped with whether NHS leasing is worth it! I've just been promoted to Band 7 and not sure whether I should even look at leasing this way, even for 2-3 years (to prevent pension deductions falling too low in the future).
Can anyone advise accordingly? Would love to lease a Tesla!
if you took the leaf as mentioned above you would sacrifice £4200 per year, which would take you back to mid band 6 from a pensions contribution point of view - or 7800 if you went for an etron (back to band 5 for your pension contribution) Can anyone advise accordingly? Would love to lease a Tesla!
on the face of it you might want to jump into a fancy car on the lease for a couple of years, and I guess for a couple of years its not going to impact your werther buying power too much down the road. The problem is that people get sucking into the lease scheem and end up staying in it for years, which starts to have a bigger impact on your grey pound.
one of my team members has been in lease cars for a few years now (on 4th) started out with something pretty cheap beacuse they were fed up with older cars unreliability, but couldnt afford a new one - their mileage claim paid the rental each month so essentially a free car, has gone steadily upscale with each change and now in a Phev and looking at EV for next lease next year.
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I always think its a bit disingenuous to state the “pension saving” in these quotes as it doesnt explain the ramifications of this very clearly
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One of my daughters works in the NHS - in her team hardly any younger staff are in it anyway, they basically think they’re being scammed as the pension scheme has been changed multiple times and they think it will keep being changed.
I always think its a bit disingenuous to state the “pension saving” in these quotes as it doesnt explain the ramifications of this very clearly
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One of my daughters works in the NHS - in her team hardly any younger staff are in it anyway, they basically think they’re being scammed as the pension scheme has been changed multiple times and they think it will keep being changed.
Currently my pension is forecast to be payable at age 67. So around another 20 years or so and I've already paid in around 10 years already.
It's obviously not suited to everyone and from what we have read here it is probably better to get independent advice if you are concerned about the pension reduction.
The car I get in April will be the second salary sacrifice NHS lease I've had and both have been 24mths so me personally I'm happy to take the "hit" on the pension
It's obviously not suited to everyone and from what we have read here it is probably better to get independent advice if you are concerned about the pension reduction.
The car I get in April will be the second salary sacrifice NHS lease I've had and both have been 24mths so me personally I'm happy to take the "hit" on the pension
Sheepshanks said:
One of my daughters works in the NHS - in her team hardly any younger staff are in it anyway, they basically think they’re being scammed as the pension scheme has been changed multiple times and they think it will keep being changed.
Yeah, youngsters always know best about pension schemes! The problems with a lot of folks in the nhs is that many of them haven't really had a pay rise for 10 years or so, but pension contributions have gone up - in the last "payrise" some bands actually ended up with less net pay due to increased pension contributions. Every month they look at their payslip and they see how much if being creamed off to the pension and feel aggrieved, not thinking that the same mount is being added by the firm.
garpat32 said:
Currently my pension is forecast to be payable at age 67. So around another 20 years or so and I've already paid in around 10 years already.
It's obviously not suited to everyone and from what we have read here it is probably better to get independent advice if you are concerned about the pension reduction.
The car I get in April will be the second salary sacrifice NHS lease I've had and both have been 24mths so me personally I'm happy to take the "hit" on the pension
everyones situation is different, and its really difficult to get a firm picture of your future expectations, I suspect that if you look at the TRS predictions they will assume full salary for long term pension estimates , and that if someone has had a salary sacrifice running for a long period of time there will be a discrepancy come the final reckoning. It's obviously not suited to everyone and from what we have read here it is probably better to get independent advice if you are concerned about the pension reduction.
The car I get in April will be the second salary sacrifice NHS lease I've had and both have been 24mths so me personally I'm happy to take the "hit" on the pension
A large portion of nhs workers currently do not work until the bitter end, but can often bale out earlier due to the pension benefits on the older schemes- this may be less the case as we go forwards, with the new schemes and the impact of salary sacrifice down the road
I am in the fortunate situation to have been in the pension scheme for 30 years and for a large part of that at fairly senior grades, so have been able to flexi retire - in my 50's
sawman said:
Yeah, youngsters always know best about pension schemes!
The problems with a lot of folks in the nhs is that many of them haven't really had a pay rise for 10 years or so, but pension contributions have gone up - in the last "payrise" some bands actually ended up with less net pay due to increased pension contributions. Every month they look at their payslip and they see how much if being creamed off to the pension and feel aggrieved, not thinking that the same mount is being added by the firm.
In the NHS scheme nothing is being added by anyone - the money all goes into government coffers. The notational amount that the employer pays makes no difference - it could be 1 pence or a million pounds every month, it doesn’t change the amount you will take home when you retire. Nor can you have the employers contribution in your pocket if you leave the scheme (nor chose to place it in a different scheme, one where they can’t keep changing it) which is the real swindle.The problems with a lot of folks in the nhs is that many of them haven't really had a pay rise for 10 years or so, but pension contributions have gone up - in the last "payrise" some bands actually ended up with less net pay due to increased pension contributions. Every month they look at their payslip and they see how much if being creamed off to the pension and feel aggrieved, not thinking that the same mount is being added by the firm.
syl said:
In the NHS scheme nothing is being added by anyone - the money all goes into government coffers. The notational amount that the employer pays makes no difference - it could be 1 pence or a million pounds every month, it doesn’t change the amount you will take home when you retire. Nor can you have the employers contribution in your pocket if you leave the scheme (nor chose to place it in a different scheme, one where they can’t keep changing it) which is the real swindle.
Agreed that its all a bit invisible, but the annual total reward statement details the employers contribution to the mythical pot. Due to the tax implications for long serving high earners some of my colleagues have stopped contributing and now get the employers contribution in their paypacket so there must be a ledger entry somewhere for this part.
The point remains that if you stay in, its a good deal, but a band 3 or 4 struggling to pay rent and clothe kids sees the pension contribution going out as a soft target on their monthly budget and opts out, but 30 years later may regret it.
Back to the lease cars, if you are a band7 and have leased audi etron or similar for the next 20 years and then retire your pension will amount to that which a band 5 would expect rather than a band 7
Edited by sawman on Sunday 16th February 11:42
Edited by sawman on Sunday 16th February 11:44
sawman said:
Agreed that its all a bit invisible, but the annual total reward statement details the employers contribution to the mythical pot.
Due to the tax implications for long serving high earners some of my colleagues have stopped contributing and now get the employers contribution so there must be a ledger entry somewhere for this part.
The point remains that if you stay in, its a good deal, but a band 3 or 4 struggling to pay rent and clothe kids sees the pension contribution going out as a soft target on their monthly budget and opts out, but 30 years later may regret it.
I’ve unfortunately had to leave the scheme at present due to those tax implications; I can only afford to be in the scheme for a few months a year. I agree that it’s a good pension, especially so for those on a low income who get to pay a much lower percentage of salary for the same benefit. Even for them, however, it’s nowhere near as good as it once was. For higher earners who are paying 14.5% plus the employers 20.68%, it’s but a shadow of its former self.Due to the tax implications for long serving high earners some of my colleagues have stopped contributing and now get the employers contribution so there must be a ledger entry somewhere for this part.
The point remains that if you stay in, its a good deal, but a band 3 or 4 struggling to pay rent and clothe kids sees the pension contribution going out as a soft target on their monthly budget and opts out, but 30 years later may regret it.
Recycling (a proportion of) the employers contribution is something that some employers are presently allowing for a small subset of employees in an effort to encourage them back into working overtime. It’s not a blanket feature afforded to all who opt out of the NHS pension scheme.
I do think that at some point over the next few decades the old age pension will become means tested under a Labour government and slowly whittled away, such that even lower earners with a pension won’t receive much, if any of it. In retrospect then, they’d have been better pissing the money up against a wall when they were young and living off the state in old age.
Edited by syl on Sunday 16th February 11:57
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