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NHS Pension - should I retire early before changes?
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# 1
Meadowman
Old 30-01-2011, 9:29 AM
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Default NHS Pension - should I retire early before changes?

I am 60 and have worked in the NHS for 10 years. Apparently there will be changes to the pension arrangements which mean future pension payments will be linked to the consumer price index as opposed to the current retail price index. I've heard that if I retire before the change kicks in my future pension will still be linked to the CPI. Is this true? And are there any other advantages in either retiring early or staying on beyond 65 (I like my job!)
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# 2
jem16
Old 30-01-2011, 9:59 AM
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Originally Posted by Meadowman View Post
I've heard that if I retire before the change kicks in my future pension will still be linked to the CPI. Is this true?
If the proposals go ahead then yes it's true.
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# 3
Katgrit
Old 30-01-2011, 10:04 AM
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Hi. I work in the NHS as a manager and one of my staff is taking early retirement so we've been discussing this recently. As far as I know, and I've not been to any meetings myself, there is currently a national role out of the new NHS pension. This was brought in about ooo off the top of my head about 4 years ago and all new starters commencing employment with the NHS will be on this new one. Existing staff in the old pension can choose to transfer over, but no-one in their right mind would do, and certainly not at your age. I dont think they are able to change existing pensions, so this is probably the new pension is based on that other whatisname index (sorry I'm using a mobile to type this so cant see your post). The only thing there IS talk of them changing with old style pensions is the amount of the lump sum. I'm sorry I dont know this inside out. My hospital is holding sessions to explain everything to staff who will be retiring in the next few years, then in a few weeks they are moving onto staff in their mid 50's. Your Trust may be planning similar info sessions very soon. Dont take what I've said as gospel. I'd ask your line manager, salaries and wages, or HR department. You should also be able to get a very accurate statement of your current situation off NHS pensions. Google NHS pension "choices" I think it what they call it. Hope this helps even a smidgen, but please hear it off someone proper!
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# 4
dzug1
Old 30-01-2011, 10:16 AM
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Quote:
Originally Posted by Meadowman View Post
I am 60 and have worked in the NHS for 10 years. Apparently there will be changes to the pension arrangements which mean future pension payments will be linked to the consumer price index as opposed to the current retail price index. I've heard that if I retire before the change kicks in my future pension will still be linked to the CPI. Is this true? And are there any other advantages in either retiring early or staying on beyond 65 (I like my job!)
The first bit about change of index is true of all public sector pensions. However retiring early will not make any difference - unless there's special arrangements just for the NHS which doesn't sound very likely. It applies to those who have been retired for years as well as future retirees.
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# 5
jem16
Old 30-01-2011, 12:29 PM
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Originally Posted by Katgrit View Post
I dont think they are able to change existing pensions, so this is probably the new pension is based on that other whatisname index
As far as the decision to use CPI or RPI existing pensions will be affected.

Quote:
The only thing there IS talk of them changing with old style pensions is the amount of the lump sum.
As far as I'm aware there is no change to the amount of lump sum you can take with the exisiting pension as that is down to government policies which still remain at 25% tax-free cash as the maximum.

The only difference between the two pension choices is that in the old pension the lump sum is an automatic entitlement of 3 times your annual pension - you can commute more but at a commutation rate of 12:1 it's not good terms.

With the new pension there is no automatic right to a lump sum. To get your lump sum you have to commute part of your pension at 12:1 commutation rate.

Last edited by jem16; 01-02-2011 at 4:03 PM.
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# 6
McKneff
Old 30-01-2011, 12:39 PM
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If I liked my job, and either way (moneywise) i would stay exactly where i was.
No one can make you feel inferior without your consent
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# 7
dzug1
Old 01-02-2011, 10:49 AM
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Originally Posted by jem16 View Post
The only difference between the two pension choices is that in the old pension the lump sum is an automatic entitlement of 3 times your annual salary - you can commute more but at a commutation rate of 12:1 it's not good terms.

With the new pension there is no automatic right to a lump sum. To get your lump sum you have to commute part of your pension at 12:1 commutation rate.
I think you mean three times the annual PENSION.

It's also worth noting that the new pension with no automatic lump sum is a larger pension in the first place. In theory the old and new are equivalent, just calculated a different way
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# 8
Hen Step
Old 01-02-2011, 11:23 AM
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With the new pension system, as long as you are capable, you could work for as long as you want. To offset the extra years, you would receive a larger monthly pension when you eventaully retire.
With only 10 years in service, I doubt you would receive a large pension, so if you love your job and want to work for another 10 years for example, it would appear the best option would be to switch to the new scheme.

There is talk of reducing the amount of lump sum that you could receive under the current scheme. I know of a lot of doctors and surgeons who are eligible for early retirement are waiting to find out what will happen. As you can imagine their lump sum can be a considerable amount under the current rules.

Good luck in whatever you decide.
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# 9
jem16
Old 01-02-2011, 4:03 PM
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I think you mean three times the annual PENSION.
Yes I did mean 3 times annual pension - thanks.
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