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  • FIRST POST
    • louloubelle79
    • By louloubelle79 5th Jul 17, 6:11 PM
    • 257Posts
    • 127Thanks
    louloubelle79
    Additional payments into NHS or private
    • #1
    • 5th Jul 17, 6:11 PM
    Additional payments into NHS or private 5th Jul 17 at 6:11 PM
    Hello
    Can anyone advise? Have NHS pension started last year (age 37) work part time so minimal in there. Have 3 other small pension pots from previous employers.

    Would I be better paying into additional payments in NHS scheme (2015) or setting up private pension? My NHS retirement age is 65.

    Thank you
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
Page 1
    • quotememiserable
    • By quotememiserable 5th Jul 17, 7:16 PM
    • 398 Posts
    • 258 Thanks
    quotememiserable
    • #2
    • 5th Jul 17, 7:16 PM
    • #2
    • 5th Jul 17, 7:16 PM
    It doesn't make a lot of difference. You can't put extra money into the NHS defined benefit side, you buy into their Additional Volutary Contribution pot, which is more or less the same as a private pension. Would you select your own investments, or just go with the default fund? If you'd go default you may as well keep it simple and go NHS.
    • Andy L
    • By Andy L 5th Jul 17, 7:40 PM
    • 8,562 Posts
    • 6,907 Thanks
    Andy L
    • #3
    • 5th Jul 17, 7:40 PM
    • #3
    • 5th Jul 17, 7:40 PM
    It doesn't make a lot of difference. You can't put extra money into the NHS defined benefit side, you buy into their Additional Volutary Contribution pot, which is more or less the same as a private pension.
    Originally posted by quotememiserable
    you can still buy additional pension instead of AVCs. You can't buy "extra years" like you could in the old schemes

    "You can buy any amount in units of £250 annual pension up to a maximum total purchase
    of:
     £5,000 annual pension if you are a member of the 1995/2008 Scheme
     £6,500 annual pension if you are a member of the 2015 Scheme,"

    https://www.nhsbsa.nhs.uk/sites/default/files/2017-02/Additional%20Pension%20%2802.2017%29%20V4.pdf
    • claire111
    • By claire111 6th Jul 17, 11:25 PM
    • 190 Posts
    • 46 Thanks
    claire111
    • #4
    • 6th Jul 17, 11:25 PM
    • #4
    • 6th Jul 17, 11:25 PM
    "you buy into their Additional Volutary Contribution pot, which is more or less the same as a private pension"

    Just plain wrong.

    Purchase of 'NHS Additional Pension' is similar to purchase of a Retirement Annuity and for many people is astonishingly good value and should be investigated and considered as part of their pension plan by anyone employed by the NHS, or anyone married to anyone employed by the NHS.
    • xylophone
    • By xylophone 7th Jul 17, 8:35 AM
    • 23,611 Posts
    • 13,748 Thanks
    xylophone
    • #5
    • 7th Jul 17, 8:35 AM
    • #5
    • 7th Jul 17, 8:35 AM
    https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension

    Additional Pension is not the same as AVC.
    • louloubelle79
    • By louloubelle79 21st Oct 17, 3:13 PM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    • #6
    • 21st Oct 17, 3:13 PM
    • #6
    • 21st Oct 17, 3:13 PM
    Thank you I have purchased another £6500 of additional pension and set up AVC pot with Prudential. Hoping to catch with not paying in enough past 20 years !!
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
    • justme111
    • By justme111 21st Oct 17, 3:27 PM
    • 2,878 Posts
    • 2,764 Thanks
    justme111
    • #7
    • 21st Oct 17, 3:27 PM
    • #7
    • 21st Oct 17, 3:27 PM
    ha. I believe most of us have not paid in enough in 20 years from 17 to 37.
    How much did it cost to buy those 6500 if you dont mind me asking?
    • louloubelle79
    • By louloubelle79 21st Oct 17, 3:39 PM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    • #8
    • 21st Oct 17, 3:39 PM
    • #8
    • 21st Oct 17, 3:39 PM
    Hi I pay £343 a month pre tax out of salary.
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
    • louloubelle79
    • By louloubelle79 21st Oct 17, 3:40 PM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    • #9
    • 21st Oct 17, 3:40 PM
    • #9
    • 21st Oct 17, 3:40 PM
    That's the max you can purchase you can obviously purchase less in values of £250 I believe.
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
    • hugheskevi
    • By hugheskevi 21st Oct 17, 10:41 PM
    • 1,920 Posts
    • 2,327 Thanks
    hugheskevi
    Would I be better paying into additional payments in NHS scheme (2015) or setting up private pension? My NHS retirement age is 65.
    Your Normal Pension age is linked to State Pension age - which will be at least age 68 for you.
    • justme111
    • By justme111 21st Oct 17, 11:15 PM
    • 2,878 Posts
    • 2,764 Thanks
    justme111
    I do not see it as a good value ..
    please correct me if I am wrong- 343×12 ×30 (years you have till retirement) =
    £ 123000. Interest on it assuming 4% growth would be ( £12300÷2)×0.04×30=£72000 giving in total about 200 k if invested assuming 4%growth. If you taken 4 % annually of it you would have about 8 k and that is leaving capital untouched.
    Ok you would save on NI as well and you might preferred no investment risk but in my mind the benefit of it is outweight by freedom to take it earlier if you wanted to and the capital left behind ( or far higher yearly money if you prefer to drawdown capital).
    • louloubelle79
    • By louloubelle79 22nd Oct 17, 8:48 AM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    Your Normal Pension age is linked to State Pension age - which will be at least age 68 for you.
    Originally posted by hugheskevi
    Thank you I did mean to put 68
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
    • louloubelle79
    • By louloubelle79 22nd Oct 17, 8:49 AM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    I do not see it as a good value ..
    please correct me if I am wrong- 343×12 ×30 (years you have till retirement) =
    £ 123000. Interest on it assuming 4% growth would be ( £12300÷2)×0.04×30=£72000 giving in total about 200 k if invested assuming 4%growth. If you taken 4 % annually of it you would have about 8 k and that is leaving capital untouched.
    Ok you would save on NI as well and you might preferred no investment risk but in my mind the benefit of it is outweight by freedom to take it earlier if you wanted to and the capital left behind ( or far higher yearly money if you prefer to drawdown capital).
    Originally posted by justme111
    Thank you will find out more
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
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