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    • Docjames
    • By Docjames 6th Oct 17, 11:43 PM
    • 13Posts
    • 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 3
    • stoozie1
    • By stoozie1 9th Oct 17, 4:20 PM
    • 398 Posts
    • 260 Thanks
    stoozie1
    we have a Fidelity SIPP each, but I feel that saying what it's invested in won't be very useful to you as it's 100% equities, and I know that's a route you wanted to avoid.
    • Docjames
    • By Docjames 9th Oct 17, 4:24 PM
    • 13 Posts
    • 4 Thanks
    Docjames
    yes...Equities are a bit too risky ...
    • ermine
    • By ermine 9th Oct 17, 4:40 PM
    • 624 Posts
    • 925 Thanks
    ermine
    yes...Equities are a bit too risky ...
    Originally posted by Docjames
    Noooo...FFS. You are 41? You have 19 years to retire at 60. What did you think made up 60% of VGLS60? Equities

    You are confusing volatility with risk. Don't do that. Sure, in a bad year equities can fall 50%. The way (among others) you manage that is as you are about to retire, perhaps derisk, either shunt out 20% of your holdings a year over the five years before retirement or shift the balance (swap some of your VGLS60 for VGLS20) over several years.

    As a rough rule of thumb money you won't be calling on for five years or more should be in equities, because inflation kills other asset classes slowly and insidiously. If you need it in less than 5 years something else will do. Inflation is bad but five years of inflation isn't too bad.

    You either need to pay for an IFA to explain this to you or learn it yourself. Try Monevator for a good UK angle on investing and why you use equity based assets for that.

    Alternatively you could celebrate the rewards for your hard work in having an excellent pension and whatever you do don't give it up It's a better place to start from than where most people are.
    • bigadaj
    • By bigadaj 9th Oct 17, 4:41 PM
    • 10,803 Posts
    • 7,100 Thanks
    bigadaj
    yes...Equities are a bit too risky ...
    Originally posted by Docjames
    But almost all 'normal' pensions, by which I mean defined contribution schemes that are largely the only ones available in the private sector, will be heavily invested in equities.

    With risk comes reward, you need to assess your risk profile and timescale for investment, and from that a suitable allocation and funds should follow.
    • Docjames
    • By Docjames 9th Oct 17, 5:33 PM
    • 13 Posts
    • 4 Thanks
    Docjames
    sorry..when I mentioned equities, I mean't individual shares...do not want to touch them, but yes...funds like VLS60 are something to look into
    • peter3hg
    • By peter3hg 9th Oct 17, 7:52 PM
    • 52 Posts
    • 58 Thanks
    peter3hg
    I'm not convinced that these days that many doctors will "almost certainly" hit the LTA.

    The 2015 scheme is CARE, with pension accruing at 1/54 of annual earnings each year (might have phrased that poorly, but you know what I mean).

    Some juniors now will, for sure.

    But I am nearly 40, and like many of my contemporaries I have recently started working part-time because I have young children and I'd like to see them occasionally. I also have chosen a specialty which pretty much requires a PhD, so I am still a couple of years off being a consultant. I earn less than £35k pa at present.

    I'm not complaining about it. But it given that even when I become a consultant my salary will be around £75k (planning go back to full-time in a couple of years), I don't think I'll hit the £50k pa pension expectation to hit the LTA. Especially as I doubt I'll be fit enough to keep working at this intensity after 60 ish.

    (for reference, if consultant salaries had kept pace with inflation from when I started medicine, the consultant starting salary would be some £20k pa higher. And pension contributions were only half as much as they are now. You can see why a) the old pension scheme was bonkers, and b) medics around our age look at those retiring now with envy)

    Like the OP I am looking at SIPPs and other options to bridge the gap.
    Originally posted by MonkeyDr
    You'd be amazed. I've done a quick calculation and assuming you stay on £35k until you are 44 at which point you become a full time consultant, you would have earned an annual pension of £54,817 at your full retirement age.
    This obviously ignores the fact that you probably already have a reasonable amount of pension built up and assumes you never get CEA, on-call allowances etc.
    • infj
    • By infj 11th Oct 17, 2:12 PM
    • 40 Posts
    • 16 Thanks
    infj
    Alternatives
    Ignore the trolls - it's only when they have to pay £600 per month for health insurance after Tories have destroyed NHS or are bankrupt because of a broken leg that they will appreciate what they had.

    Do not give up the NHS Pension but you do need to consider what you actually want to do in the future. You basically need cash and investments to provide you with an income until you can take your NHS pension without the penalties being astronomical.
    So eg. do you want to semi retire at 55 - as a doctor you are in a great position cos Trusts will fall over themselves to keep you working even if only for 1-2 sessions a week. You then just need enough money to cover the shortfall of your living expenses - NB not your income but what you actually need to live on.
    A private pension has tax advantages but bear in mind that the government can mess with their rules too. So whacking the max into ISAs every year is the best both cash and shares.
    The Ermine above refers you to Monevator - a great site - go there and read about index trackers and passive investing and then start one.
    I have made an average 7% pa on mine over the past 20 years despite crashing stockmarkets.


    Good luck.
    • stoozie1
    • By stoozie1 11th Oct 17, 2:20 PM
    • 398 Posts
    • 260 Thanks
    stoozie1
    infj (presumably this is your Myers-Briggs?), can I just clarify why you think the actuarial reduction wouldn't be worth paying? It's just it's on the cards for us to do this with OH's NHS pension, and so I wondered.

    Not trying to derail, but it could be relevant to the OP too.
    • dunstonh
    • By dunstonh 11th Oct 17, 2:41 PM
    • 89,930 Posts
    • 56,605 Thanks
    dunstonh
    The Ermine above refers you to Monevator - a great site - go there and read about index trackers and passive investing and then start one.
    That would be bad investing. Whether it is managed or passive, single sector investing is bad investing. Suggesting such a method to someone who has made poor investment decisions in the past is not a good idea.
    A private pension has tax advantages but bear in mind that the government can mess with their rules too. So whacking the max into ISAs every year is the best both cash and shares.
    What basis have you made such a direct recommendation? Why are you suggesting both cash ISA and S&S ISA?

    I have made an average 7% pa on mine over the past 20 years despite crashing stockmarkets.
    That is quite low for a 20 year period. This suggests you are not single sector passive investing as you are recommending the OP to do.
    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 an Independent Financial Adviser local to you.
    • MonkeyDr
    • By MonkeyDr 11th Oct 17, 11:25 PM
    • 124 Posts
    • 160 Thanks
    MonkeyDr
    You'd be amazed. I've done a quick calculation and assuming you stay on £35k until you are 44 at which point you become a full time consultant, you would have earned an annual pension of £54,817 at your full retirement age.
    This obviously ignores the fact that you probably already have a reasonable amount of pension built up and assumes you never get CEA, on-call allowances etc.
    Originally posted by peter3hg
    Thank you, that is v interesting. I thought that I had done my numbers right (and my career hasn't been entirely linear so I am a little worse off than others my age / grade), but I will go back and look again. Any maybe try and get a quick LISA before I am too old instead of a further pension...
    • ermine
    • By ermine 13th Oct 17, 10:12 PM
    • 624 Posts
    • 925 Thanks
    ermine
    That would be bad investing. Whether it is managed or passive, single sector investing is bad investing. Suggesting such a method to someone who has made poor investment decisions in the past is not a good idea.
    Originally posted by dunstonh
    Monevator's site makes the very same observation to my eyes, diversify is a frequent theme, both within and across asset classes. There's a case to be made that the investing learning curve may be tough for the OP, but I have to push back on the indication that Monevator would advocate single sector investing, it just ain't his style at all IMO
    • Tabbytabitha
    • By Tabbytabitha 16th Oct 17, 6:32 PM
    • 495 Posts
    • 967 Thanks
    Tabbytabitha
    +1

    Those of us in the real world would love a generous state guaranteed final salary pension, paid for by the rest of us.
    Originally posted by caronoel
    Working for the NHS is about as real as it gets!
    • TARDIS
    • By TARDIS 16th Oct 17, 7:00 PM
    • 51 Posts
    • 33 Thanks
    TARDIS
    Thank you, that is v interesting. I thought that I had done my numbers right (and my career hasn't been entirely linear so I am a little worse off than others my age / grade), but I will go back and look again. Any maybe try and get a quick LISA before I am too old instead of a further pension...
    Originally posted by MonkeyDr
    You can get a rough estimation of your eventual 2015 pension using the BMA calculator or the one on the doctors.net finance forum, although I don't think either are up to date with the recent rise in NPA age.

    Remember to add on what you have already accrued in the 2008 scheme which you can find on your total rewards statement: https://www.totalrewardstatements.nhs.uk

    You have to be under 40 to start a LISA and I think you mentioned you're 41 so that option's out I'm afraid. You can still use a standard ISA to plug any gap between early retirement and NPA if you wish. You don't get the tax relief on contributions, but neither will it be subject to income tax on the way out so not an awful idea (whereas leaving the NHS pension altogether would be )
    Last edited by TARDIS; 16-10-2017 at 8:01 PM. Reason: Incorrect link used initially
    • Docjames
    • By Docjames 16th Oct 17, 10:04 PM
    • 13 Posts
    • 4 Thanks
    Docjames
    Thanks,
    I have an ISA already. I am looking to open a SIPP with AJ BELL or Charles Stanley. .probably deals with only multi asset funds like
    1. Vanguard lifestrategy 60.
    2. HSBC cautious fund
    3 L and G multi fund 5
    Will look into others just to spread the risk..no shares for sure
    Doc James
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