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  • FIRST POST
    • cavenger
    • By cavenger 9th May 17, 5:58 PM
    • 2Posts
    • 1Thanks
    cavenger
    NHS Pension - worthwhile?
    • #1
    • 9th May 17, 5:58 PM
    NHS Pension - worthwhile? 9th May 17 at 5:58 PM
    Hello,
    I'm in my mid 30's and have recently joined the NHS. I'm debating whether I should try to opt out of the NHS pension or join their alternative scheme. It took me a while to understand the mechanics of the scheme as nobody seemed to know/wanted to say, the gist of it is that you contribute around 12% of your salary and the NHS contributes 14% to make a total contribution of 26%, but your pension pot is worth 2% of your salary, the sweetener being that 2% is guaranteed for life at retirement (assuming the rules don't change).

    I've modelled this out in Excel - Assuming I retire at 73, my pension pot would be worth around 22,650 and I would have contributed almost 123K - if I live at least 6 years after retirement I'll break even.

    I just wanted to get a second independent opinion if this is worthwhile as I'm wondering if I'd be better off putting 12% of my salary into a FTSE 100 tracker.

    Thanks
Page 3
    • stoozie1
    • By stoozie1 12th May 17, 6:56 PM
    • 238 Posts
    • 89 Thanks
    stoozie1
    Thanks peter3hg. He's a dentist, and he won't hit the LTA with the SIPP plus 2x NHS DB scheme memberships, but thanks for mentioning it just in case
    • Ray Singh-Blue
    • By Ray Singh-Blue 17th May 17, 6:04 PM
    • 317 Posts
    • 411 Thanks
    Ray Singh-Blue
    Thanks peter3hg. He's a dentist, and he won't hit the LTA with the SIPP plus 2x NHS DB scheme memberships, but thanks for mentioning it just in case
    Originally posted by stoozie1
    Are you sure? NHS pension of £43K per year, 1995 scheme = lifetime allowance of £1M. (20 x annual benefit + lump sum)
    • justme111
    • By justme111 18th May 17, 9:01 AM
    • 2,698 Posts
    • 2,597 Thanks
    justme111
    Those who would get 43k pension are in a minority and/or they exist in theory only; they would have to start dentistry at 25 and continue till 65 grossing about 80 k per year, all NHS.
    • Malthusian
    • By Malthusian 18th May 17, 9:10 AM
    • 2,393 Posts
    • 3,320 Thanks
    Malthusian
    Prospects.ac.uk says NHS consultant dentists can earn just over 100 grand. And as this is the 1995 final salary scheme we're talking about, you don't need to gross 80k per year until 65, only at 65. Plus you could have bought added years. I don't know how many dentists do only or mostly NHS work but it seems more than achievable to me.
    • brook2jack
    • By brook2jack 18th May 17, 12:38 PM
    • 3,972 Posts
    • 3,597 Thanks
    brook2jack
    Most dentists will hit their peak earning capacity as they speed up , build a stable patient list and become experienced mid thirties to fifties. After that the physical and mental strains take their toll and they slow down. Back ,skin and stress complaints mean few make it to 65 retirement age still working at full pace.

    There are only a handful of dental consultants.

    82% of dentists do not own a practice so to earn £80,000 a year they would have to complete around 10,000 units of dental treatment i.e. complete around 50 patients treatment each and every day.

    Therefore as justme111 said , in theory it's possible, in reality a handful of consultants and practice owners might achieve this but the average dentist hasn't a hope in hell. This is a more realistic survey of earnings but includes private earnings as well

    https://www.smarterwebcompany.co.uk/dentalrecruitnetwork2-co-uk/_img/Copy%20of%20Dental%20Salary%20Survey%202016.pdf
    • justme111
    • By justme111 18th May 17, 1:48 PM
    • 2,698 Posts
    • 2,597 Thanks
    justme111
    Prospects.ac.uk says NHS consultant dentists can earn just over 100 grand. And as this is the 1995 final salary scheme we're talking about, you don't need to gross 80k per year until 65, only at 65. Plus you could have bought added years. I don't know how many dentists do only or mostly NHS work but it seems more than achievable to me.
    Originally posted by Malthusian
    It is not final salary scheme and have not used to be for general dental practitioners which most of them are . Yes consultants can earn just over 100 grand. So can chefs and I am sure some elite escorts services. The vast majority do not though. It is achievable (or used to be in the past) but in practice it does not happen and should not happen . I can assure you it looks "more than achievable" to you only because you know little about details of work and pensions of dentists.
    • peter3hg
    • By peter3hg 18th May 17, 6:56 PM
    • 46 Posts
    • 50 Thanks
    peter3hg
    Those who would get 43k pension are in a minority and/or they exist in theory only; they would have to start dentistry at 25 and continue till 65 grossing about 80 k per year, all NHS.
    Originally posted by justme111
    Don't forget that the value is revalued at 1.5% above CPI inflation each year so the early years are worth a lot more come retirement than just a 54th of the original salary.
    Last edited by peter3hg; 18-05-2017 at 7:23 PM.
    • stoozie1
    • By stoozie1 18th May 17, 7:09 PM
    • 238 Posts
    • 89 Thanks
    stoozie1
    Thanks for the responses, as these were aimed at me, without wanting to detail the thread, yes @ray singh-blue i am sure

    OHs 1995 scheme is £9650 annual plus £28950 lump sum, and by the time he is no longer able to contribute to the nhs scheme his 2015 annual benefit will be 14k max in today's money.

    So yep, plenty of headroom for a sipp before hitting the LTA.

    Thanks for checking though.
    • brook2jack
    • By brook2jack 18th May 17, 9:33 PM
    • 3,972 Posts
    • 3,597 Thanks
    brook2jack
    Private dentists earn around 5% more than mostly NHS dentists. The overheads are much,much larger and a lot fewer patients are seen each day.

    The only way to earn a large amount in dentistry is to buy into a practice , but the economics of this means fewer and fewer are able to do this. 18% of dentists are practice owners and this figure is dropping each year.

    The figures quoted here are recognisable and include practice owners and NHS and private work https://www.smarterwebcompany.co.uk/dentalrecruitnetwork2-co-uk/_img/Copy%20of%20Dental%20Salary%20Survey%202016.pdf

    A colleague who places implants spent over £250,000 in training and adapting a surgery to place implants. He has recently spent £80,000 on a ct scanner and just to buy the "spanners" and bits and bobs to place just one type of implant system costs over £12,000. The cost of his annual indemnity insurance (malpractice) is over £17000 a year compared to a general dentist at £5000 a year. Dentistry is very expensive to provide , the overheads are huge , dental inflation is at 10% a year and has been for years. There is not the profit margin in dentistry people think there is.


    Sorry replying to a message that's disappeared. Left reply on as an indication of costs and dental earnings.
    Last edited by brook2jack; 18-05-2017 at 9:36 PM.
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