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  • FIRST POST
    • dutchcloggie
    • By dutchcloggie 13th Jun 17, 10:13 PM
    • 130Posts
    • 27Thanks
    dutchcloggie
    NHS Pensions: What is what?
    • #1
    • 13th Jun 17, 10:13 PM
    NHS Pensions: What is what? 13th Jun 17 at 10:13 PM
    Hello,

    I am looking to increase my NHS pension but I don't understand any of the terms used so I can't really make a choice as to what would be best for me.
    I am 42 and started working in the NHS in September 2015. I have had no pension from previous jobs so I am starting from zero. My partner is a lot younger than I am and is currently saving around £450 per month for her pension in the hope she can retire at the same time when I turn 67 o we can hopefully do some nice things together.
    I thought I could just ask payroll to take an extra £200 per month out of my salary and add it to my pension. How silly of me. I got a really complicated response about the following things:
    Additional Pension
    Early Retirement Reduction Buy Out
    Money Purchase Additional Value Pension
    Bigger Lump Sum Purchase

    I don't understand which of these options would be best or even what the actual difference is. I am not asking for tax reasons as that is way beyond my tiny brain. I just want the most money when I retire and I want to pay an extra £200 per month and just increase that every time my salary goes up (my wife is clever and puts 50% of every pay rise straight into her pension plan). I think I prefer a larger monthly pay out to a lump sum payout.

    I'm sorry if this sounds stupid but I am from Holland so I don't understand the British tax system very well....

    can anyone help me with this please?

    Thanks.
Page 1
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 10:31 PM
    • 1,607 Posts
    • 689 Thanks
    Dazed and confused
    • #2
    • 13th Jun 17, 10:31 PM
    • #2
    • 13th Jun 17, 10:31 PM
    You may be able to quickly discount two options,

    Additional Pension - one to consider

    Early Retirement Reduction Buy Out - not of interest if you're happy to work to normal pension age

    Money Purchase Additional Value Pension - one to consider

    Bigger Lump Sum Purchase - based on your original post this can be ignored
    • justme111
    • By justme111 13th Jun 17, 10:43 PM
    • 2,757 Posts
    • 2,645 Thanks
    justme111
    • #3
    • 13th Jun 17, 10:43 PM
    • #3
    • 13th Jun 17, 10:43 PM
    A bit off topic - I believe there is niche on the market- ISAS with knowledge of occupational schemes and desire to offer this advice.
    • xylophone
    • By xylophone 13th Jun 17, 11:06 PM
    • 22,432 Posts
    • 12,935 Thanks
    xylophone
    • #4
    • 13th Jun 17, 11:06 PM
    • #4
    • 13th Jun 17, 11:06 PM
    Hello,

    I am looking to increase my NHS pension

    Have you seen this?

    https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension
    • dutchcloggie
    • By dutchcloggie 14th Jun 17, 4:20 PM
    • 130 Posts
    • 27 Thanks
    dutchcloggie
    • #5
    • 14th Jun 17, 4:20 PM
    • #5
    • 14th Jun 17, 4:20 PM
    Hi,
    Yes I have seen that page, looked at all the options and did not understand them.


    Ideally what I would like is to pay money every month depending on how much money I have left. So like a savings account. But I seem to think pensions don't work that way?
    It seems that the only thing I can do with the NHS pension is to say: I want to buy another £20,000 (for example) that I will get once I retire and I am buying that by paying £x per month, until I have reached £20,000. Is that right?
    • atush
    • By atush 14th Jun 17, 9:49 PM
    • 16,164 Posts
    • 9,856 Thanks
    atush
    • #6
    • 14th Jun 17, 9:49 PM
    • #6
    • 14th Jun 17, 9:49 PM
    You can have an AVC that might work that way, or you c an get a personal pension that works that way.

    The main DB NHS pension cant work that way.
    • dutchcloggie
    • By dutchcloggie 15th Jun 17, 8:25 AM
    • 130 Posts
    • 27 Thanks
    dutchcloggie
    • #7
    • 15th Jun 17, 8:25 AM
    • #7
    • 15th Jun 17, 8:25 AM
    I think I understand. I also seem to think that whatever kind of NHS pension I choose, it is always better than what is available on the open market? Is this right?
    • atush
    • By atush 15th Jun 17, 11:05 AM
    • 16,164 Posts
    • 9,856 Thanks
    atush
    • #8
    • 15th Jun 17, 11:05 AM
    • #8
    • 15th Jun 17, 11:05 AM
    Not necessarily the AVC option. Depends on the investments offered, and the charges.
    • justme111
    • By justme111 15th Jun 17, 12:07 PM
    • 2,757 Posts
    • 2,645 Thanks
    justme111
    • #9
    • 15th Jun 17, 12:07 PM
    • #9
    • 15th Jun 17, 12:07 PM
    Sorry I am not very familiar with present NHS additional pension options. You may have to go on their website and crunch some numbers. See what you have to pay to get what and compare it with what you could have had in private sector. Their head office replies to emails with questions as well. Normally NHS pension it is superior as your employer (trust/area team or whatever they called now) pays in more than you do. I do not think it applies to buying additional pension hence this crucial benefit may be lost.
    • dutchcloggie
    • By dutchcloggie 15th Jun 17, 12:08 PM
    • 130 Posts
    • 27 Thanks
    dutchcloggie
    Aha, I think I'm beginning to understand. I can buy an AVC from any pension provider, it does not have the be the one the NHS suggests for me.

    So it sounds like that is the most flexible option for me.
    I shall have a nosey around that option.
    • Silvertabby
    • By Silvertabby 15th Jun 17, 1:29 PM
    • 1,398 Posts
    • 1,637 Thanks
    Silvertabby
    Aha, I think I'm beginning to understand. I can buy an AVC from any pension provider, it does not have the be the one the NHS suggests for me.

    So it sounds like that is the most flexible option for me.
    I shall have a nosey around that option.
    It depends on what you want to do. The in-house NHS MPAVC could give you the option of buying more index-linked pension in the NHS. That won't be possible with a separate free-standing AVC.
    • atush
    • By atush 15th Jun 17, 2:43 PM
    • 16,164 Posts
    • 9,856 Thanks
    atush
    It really depends on if you intend to retire early- or not.

    If you do, buying additional pension, then having it reduced by taking your pension early wont give you the best value?
    • dutchcloggie
    • By dutchcloggie 15th Jun 17, 2:45 PM
    • 130 Posts
    • 27 Thanks
    dutchcloggie
    Ah, yes, good point. I will get my NHS pension at 67. If I want to retire early, should I avoid the AVC and go for a lump sum payment instead, say, at 64? I don't know if I will retire early (but I suspect I will if possible).
    • Manxman in exile
    • By Manxman in exile 16th Jun 17, 11:50 AM
    • 713 Posts
    • 489 Thanks
    Manxman in exile
    Your NHS trust should(?) be able to put you in touch with someone who should be able to help explain to you (in plain English) what the NHS pension scheme options are. This person will be called "Pension liaison officer" or something like that. Depending on whether your trust's payroll is in-house or out-sourced they may be employed directly by the trust or their payroll provider. (Ask your manager, or HR, or you ought to have a payroll contact anyway).


    Please note that this Pension liaison officer will not be able to advise you as to what best to do - they are not regulated to do so. But what they should be able to do is to explain to you what NHS options are available to you, and hopefully this will help you with your decision.


    EDIT: I'm not sure if I follow you about increasing the lump sum payment? I would have thought you'd be better off by maximising the annual pension payment rather than the lump sum? But I may be misunderstanding you.


    Personally, I would have thought that any NHS option would be better than any private option. That was certainly true when I left 5 years ago, but I'm not familiar with current scheme (I was in the 1995 scheme) so I may well be wrong now.
    Last edited by Manxman in exile; 16-06-2017 at 11:56 AM. Reason: Addition
    • Manxman in exile
    • By Manxman in exile 16th Jun 17, 11:55 AM
    • 713 Posts
    • 489 Thanks
    Manxman in exile
    The edit para is meant to be at the end of the previous post
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