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  • FIRST POST
    • Docjames
    • By Docjames 6th Oct 17, 11:43 PM
    • 12Posts
    • 4Thanks
    Docjames
    Alternative to nhs pension?
    • #1
    • 6th Oct 17, 11:43 PM
    Alternative to nhs pension? 6th Oct 17 at 11:43 PM
    Hi,
    I am a doctor in A and E,have a pension in the 2008 scheme
    Been contributing since 2009.People in general praise the NHS pension and would love to have it. But lately we doctors have been chatting about it and have some serious concerns.
    1. Our contributions are just increasing and the benefits remain the same.
    2. The pension age keeps getting pushed back, so we aren't sure when we will be able to enjoy the pension as our jobs are getting more stressful. .due to heavy under staffing etc.
    I wonder if having a SIPP would be of help.
    I wish to contribute around 80,000 to 100000 over the next decade.
    Just wish to know about the platform and funds. .There are so many options.
    How do you decide? Is an IFA needed? Or one just puts in money into funds like the vanguard lifestrategy 60?
    Or a private pension is the way forward?
    Some insight would be welcome. .
    Dr James. .
Page 1
    • PeacefulWaters
    • By PeacefulWaters 7th Oct 17, 12:03 AM
    • 6,970 Posts
    • 8,586 Thanks
    PeacefulWaters
    • #2
    • 7th Oct 17, 12:03 AM
    • #2
    • 7th Oct 17, 12:03 AM
    Whatever you do stay in the NHS pension scheme.

    Options include AVCs within the NHS, SIPP and personal pension.

    While an IFA is an option for advice, if you do your homework you should be able to DIY without incurring an advice fee.
    • dunstonh
    • By dunstonh 7th Oct 17, 12:05 AM
    • 89,847 Posts
    • 55,437 Thanks
    dunstonh
    • #3
    • 7th Oct 17, 12:05 AM
    • #3
    • 7th Oct 17, 12:05 AM
    1. Our contributions are just increasing and the benefits remain the same.
    Not unexpected given how beneficial the scheme is.
    2. The pension age keeps getting pushed back, so we aren't sure when we will be able to enjoy the pension as our jobs are getting more stressful. .due to heavy under staffing etc.
    Welcome to the real world. Public sector retirement ages have been lower than private sector and people are living longer. You can still fund that gap if you want to go earlier though. You dont have to retire at scheme age.

    I wonder if having a SIPP would be of help.
    For additional planning, its certainly an option. Not a replacement though. That would be crazy.

    How do you decide? Is an IFA needed? Or one just puts in money into funds like the vanguard lifestrategy 60?
    An IFA is not needed. However, there is more to life than VLS60. Like any job, you either DIY or your pay someone to do it. Choice is yours.

    Or a private pension is the way forward?
    private pension is a term used to cover any type of pension not offered via the employer. Its too generalistic to mean anything.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • badmemory
    • By badmemory 7th Oct 17, 6:31 AM
    • 795 Posts
    • 776 Thanks
    badmemory
    • #4
    • 7th Oct 17, 6:31 AM
    • #4
    • 7th Oct 17, 6:31 AM
    As you are a newbie I am going to apologise before I start. I do appreciate that the intelligence required to be a doctor is not the same as that required to be for example a financial advisor. Please read a few news stories about older doctors than yourself retiring early because the amount of pension they have has become a problem. Then come back & realise that a lot of us that have worked all their lives without having access to a pension even remotely as good as yours would (metaphorically obviously) kill for a pension like yours.

    However, a SIPP set up AS WELL as the pension you already have, could assist you to retire at say 57 without impacting your NHS pension.

    However (and this is very bad advice) as a taxpayer I would be truly grateful if you & your colleagues decided to come out of your pension scheme as it would save me a fortune.
    • crv1963
    • By crv1963 7th Oct 17, 7:04 AM
    • 122 Posts
    • 382 Thanks
    crv1963
    • #5
    • 7th Oct 17, 7:04 AM
    • #5
    • 7th Oct 17, 7:04 AM
    Hi DocJames,


    I too am in the NHS Scheme - 1995 version- it really is one of the best available. I have spent considerable time doing my own research into pensions and saving for my retirement which will be in the next 1-6 years as I can take my nhs pension next year. I'd suggest that you have a read of a few of the threads and a look at a few other sites.


    You have to make sure that you don't/ won't get caught by the Life Time Allowance (LTA) to approximate how much you'll be near it you can work an approximation out by calculating your pension as follows-(Figures are for example only)


    Salary- 50k
    Expected Pension- 25k (50% of salary with full years in)
    Tax Free Lump Sum- 75k (3x annual pension)
    LTA= 20x annual pension- 500k + TFLS 75K= 575k


    Therefore you could save up to another 425k in a SIPP but would have you sailing very close to the LTA.


    The advantage of having a SIPP as well as NHS Pension is the option to take this 10 years before the state pension and NHS Pension age.


    The main advantages to staying in the NHS Pension are a) the pension is both linked to your earnings- the more your annual salary the greater your pension and it is index linked, b) death in service benefits- twice your annual income as a tax free lump sum to your nominated person or spouse followed by a survivor pension of half that which you would of expected to receive, c) ill health pension should you need to retire before pensionable age.


    You could invest in other areas to build a lump sum to enable you to retire at an earlier age than is forecast at present using ISAs etc.


    Whatever you do don't give up something that is in fact worth hundreds of thousands of pounds for 9% of your salary! And is fully guaranteed so not at risk if the stock market nose dives just as you plan to use it!


    I don't work in A&E but my sister in law does-I do admire your skills and dedication and know from experience how frustrating some of the things we NHS staff have to do! My wife works in the private (health) sector it really isn't much better, different **** but still lots of it!


    CRV
    Last edited by crv1963; 07-10-2017 at 7:13 AM.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • stoozie1
    • By stoozie1 7th Oct 17, 7:58 AM
    • 339 Posts
    • 185 Thanks
    stoozie1
    • #6
    • 7th Oct 17, 7:58 AM
    • #6
    • 7th Oct 17, 7:58 AM
    How old are you?
    • victordent
    • By victordent 7th Oct 17, 8:18 AM
    • 12 Posts
    • 1 Thanks
    victordent
    • #7
    • 7th Oct 17, 8:18 AM
    • #7
    • 7th Oct 17, 8:18 AM
    I am 41. I took a break after med school to work in the middle East and joined the nhs again.
    • caronoel
    • By caronoel 7th Oct 17, 8:24 AM
    • 759 Posts
    • 966 Thanks
    caronoel
    • #8
    • 7th Oct 17, 8:24 AM
    • #8
    • 7th Oct 17, 8:24 AM
    ...as a taxpayer I would be truly grateful if you & your colleagues decided to come out of your pension scheme as it would save me a fortune.
    Originally posted by badmemory
    +1

    Those of us in the real world would love a generous state guaranteed final salary pension, paid for by the rest of us.
    • JoeCrystal
    • By JoeCrystal 7th Oct 17, 8:38 AM
    • 1,276 Posts
    • 727 Thanks
    JoeCrystal
    • #9
    • 7th Oct 17, 8:38 AM
    • #9
    • 7th Oct 17, 8:38 AM
    Hi,
    I am a doctor in A and E,have a pension in the 2008 scheme
    Been contributing since 2009.People in general praise the NHS pension and would love to have it. But lately we doctors have been chatting about it and have some serious concerns.
    1. Our contributions are just increasing and the benefits remain the same..
    Originally posted by Docjames
    In spite of raising contribution rate and retirement age, it is still light years ahead of the most pension schemes in the country. Generally speaking, the annual report for 16/17 say that the standard contribution rate is 34.3% of your salary. The average contribution rate paid by NHS employees is 9.5%. So the cost for the NHS employees are still extremely cheap, especially with Ill Health Retirement, purchasing of Additional Pension, Lump sum on Death and pensions for OH and so on.
    • p00hsticks
    • By p00hsticks 7th Oct 17, 8:55 AM
    • 5,618 Posts
    • 5,173 Thanks
    p00hsticks
    I am 41. I took a break after med school to work in the middle East and joined the nhs again.
    Originally posted by victordent
    I aassume stoozie1's question was directed at the OP - unless you've changed username you are not he/she.
    • Docjames
    • By Docjames 7th Oct 17, 8:59 AM
    • 12 Posts
    • 4 Thanks
    Docjames
    I appreciate the benefits of the pension. The main issueI have which most of my colleagues agree on is that the pension age which was 60, then 65 and now 68..At this rate it will be pushed to 75 as HMG keeps changing the goalposts. .
    That's a concern. .
    James
    • JoeCrystal
    • By JoeCrystal 7th Oct 17, 9:08 AM
    • 1,276 Posts
    • 727 Thanks
    JoeCrystal
    I appreciate the benefits of the pension. The main issueI have which most of my colleagues agree on is that the pension age which was 60, then 65 and now 68..At this rate it will be pushed to 75 as HMG keeps changing the goalposts. .
    That's a concern. .
    James
    Originally posted by Docjames
    You can still access the pension at 55 so that's fine although the pension is reduced by 40%. You do have option to pay additional contributions to buy out the reduction that would apply if the member retires before their Normal Pension Age at the maximum of 3 years earlier. So really, it is up to your colleagues to find a way to make up the gap between when they want to retire and when their pensions kicks in and they still get their state pension at SPA as well.
    • Docjames
    • By Docjames 7th Oct 17, 9:11 AM
    • 12 Posts
    • 4 Thanks
    Docjames
    Sorry. .used my partners phone to reply and didn't realise it was in his login. .
    I am 41..female. .consultant A and E. .
    • Docjames
    • By Docjames 7th Oct 17, 9:13 AM
    • 12 Posts
    • 4 Thanks
    Docjames
    At 55, the pension which is to be taken at 65 decreases by 76 percent. .
    • JoeCrystal
    • By JoeCrystal 7th Oct 17, 9:20 AM
    • 1,276 Posts
    • 727 Thanks
    JoeCrystal
    At 55, the pension which is to be taken at 65 decreases by 76 percent. .
    Originally posted by Docjames
    Really? Just had a quick look at the NHSBA leaflet issued Link here and it say that your pension is reduced by if you choose to retire early. The pension is reduced by the percentage below:

    6% if retiring one year earlier to 47% if retiring 13 years earlier. So assuming your SPA is 68 then retiring at 55 would reduce your pension reduced by 47%? I am sure people who are lot more familiar with NHS pension will be happy to correct us.

    Either way, you do have lot of options and it really depend on how much retirement income you need and work backward from it. It could be that you may be able to retire at 55 living on the reduced NHS pension providing you put enough aside to cover the shortfall if needed until your state pension kicked in.
    Last edited by JoeCrystal; 07-10-2017 at 9:32 AM.
    • crv1963
    • By crv1963 7th Oct 17, 9:52 AM
    • 122 Posts
    • 382 Thanks
    crv1963

    Either way, you do have lot of options and it really depend on how much retirement income you need and work backward from it. It could be that you may be able to retire at 55 living on the reduced NHS pension providing you put enough aside to cover the shortfall if needed until your state pension kicked in.
    Originally posted by JoeCrystal

    If I were you Dr James I'd speak to the Trust Pensions Officer and get a figure for how much of your LTA you will use via the pension pot and if there is some slack I'd look at starting a SIPP, which fund depends on your attitude to risk.


    Then I'd look at ISAs, and try to build a pot of money/ investments that I could use to draw upon to bridge the gap between me "retiring" and my deferred NHS Pension starting then my State Pension starting.


    If you are not opposed to locum work per se that could be an option once you leave on early "retirement".


    My personal situation is I am retiring at 55 (MHO), then agency for a few years (2-5), put most of that income into a SIPP and ISAs so that my wife and I can completely stop work at me age 60 and her age 57. It may be from my figures that I have to work until I'm 62 but it is still 5 years before my state pension.


    Look at the thread - What is your number on here it gives a basis for you to work out what level of income you are happy with once you stop work.


    CRV
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • stoozie1
    • By stoozie1 7th Oct 17, 10:41 AM
    • 339 Posts
    • 185 Thanks
    stoozie1
    Thanks for giving your age, that helps.

    I think you have some membership righrs accrued in the 2008 scheme but are now accruing benefits in the 2015 scheme.

    This changes the advice given upthread with regards to accrual rates and death in service benefits.

    Have you checked your most recent TRS? This is a good place to start and you should now have 2 years benefits in the new scheme displayed.

    For what its worth, my OH has NHS pension in both the 1995 and 2015 schemes, and to enable early retirement, to add flexibility and to improve the death in service benefits, we both also have SIPPs, which would be a possible avenue to explore.

    All the best!
    • Docjames
    • By Docjames 7th Oct 17, 11:10 AM
    • 12 Posts
    • 4 Thanks
    Docjames
    Hi,
    That's the issue. .stoozie1, to be honest I have an stocks and shares isa. I had shares in provident financial since 3 years. ..After the crash in the price, my confidence in investing has really slumped.
    So looking at Sipps though prudent being a higher band tax payer is a problem as I am unsure what to invest in. ..
    I looked at some multi asset funds and some platforms like HL and A J Bell but this mindset of "what if I lose more money "..keeps coming up.
    • JoeCrystal
    • By JoeCrystal 7th Oct 17, 11:18 AM
    • 1,276 Posts
    • 727 Thanks
    JoeCrystal
    Hi,
    That's the issue. .stoozie1, to be honest I have an stocks and shares isa. I had shares in provident financial since 3 years. ..After the crash in the price, my confidence in investing has really slumped.
    So looking at Sipps though prudent being a higher band tax payer is a problem as I am unsure what to invest in. ..
    I looked at some multi asset funds and some platforms like HL and A J Bell but this mindset of "what if I lose more money "..keeps coming up.
    Originally posted by Docjames
    If you are investing for decades long term then rather thinking losing money, you should be seeing it as an opportunity to buy units even more cheaper. If you don't have any confidence in investing then you might as well see an IFA to give yourself a better chance in getting higher return. .
    • crv1963
    • By crv1963 7th Oct 17, 11:28 AM
    • 122 Posts
    • 382 Thanks
    crv1963
    Hi,

    I looked at some multi asset funds and some platforms like HL and A J Bell but this mindset of "what if I lose more money "..keeps coming up.
    Originally posted by Docjames

    But if you have in mind a date/ age to retire then from what I have read on this site is you can plan and know that eventually markets do recover so stay invested for the long term 10 yrs+.


    If the market crashes then unless it's on the day that you have issued instructions to sell you simply can delay the retirement until your funds reach a level that you are happy with?


    So for arguments sake you decide I'm retiring age 55. (You invest and the markets go up and down but you keep putting money in sometimes you get more (when it's down) and sometimes less (when it's up) but as long as it's overall line is upwards you'll be okay.) then you know that your investment time in the market is 14 years, so you can start transferring funds to less risky funds a few years before your planned retirement date.


    If you spread your risk by having cash, S&S and bonds you can do all you can to minimise loss.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
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