NHS Pension. Should I buy add years?

butterfly72

I managed to show my interest in buying additional years before the April 08 deadline. My birthday is looming and a quote is on the way. I understand that buying years is fairly expensive. My question is, who can I speak to, to find out if its worth me buying? My pensions officer said she was unable to advise me and can only offer the quote.

I've worked for the NHS and payed in for 7 years full time, but would like to have kids = maternity leave and then maybe work part-time and then who knows if i'll stay with the NHS to 60 or 65. Or are ANY amount of years I contribute/buy in this scheme worth it? How do i find out? ( I have looked on the NHS pension site.. but don't really understand it!)

many thanks.

KingCheeseZombie

The cost/benefit of buying added years within the NHS Pension Scheme depends on a) your age b) the length/value (amount of added years you want) take out.

The older you are (i.e. the nearer you are to retirement) the more limited you are in terms of allowed contract length - this would increase the extra monthly amount payable as you have less time to pay for it.

You should contact the NHS Pensions Division in the first instance - they should be able to tell you the types of added years contracts you will be entitled to (in your case mainly the length) - however, they are not in the habit of giving financial advice - you will to seek this independently or contact your Pensions officer at work who should (emphasis on the word should) provide you with help/direction.

dunstonh

My question is, who can I speak to, to find out if its worth me buying? My pensions officer said she was unable to advise me and can only offer the quote.

IFAs are the only ones allowed to give you advice on this.

Generally though, you find added years looks like an expensive option but it is also the one that usually provides the most benefit. That is if you intend to take the retirement benfits at the scheme age.

MikeJones_2

Hi dunstonh,

dunstonh wrote: »

IFAs are the only ones allowed to give you advice on this.

As far as I was aware, the FSA does not regulate advice given on added-years. It falls within the remit of unregulated activity in the same way that advice given on the merits of a transfer of benefits between two defined benefit schemes is not regulated.

Nevertheless, seeking the help of an IFA (and particularly one that specialises in occupational pension schemes) would make good sense.

dunstonh wrote: »

Generally though, you find added years looks like an expensive option but it is also the one that usually provides the most benefit. That is if you intend to take the retirement benfits at the scheme age.

In my experience, I'd agree that added years does most often represent very good value - but it will depend upon your personal situation, which an IFA will help to explain.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

dunstonh

As far as I was aware, the FSA does not regulate advice given on added-years. It falls within the remit of unregulated activity in the same way that advice given on the merits of a transfer of benefits between two defined benefit schemes is not regulated.

Nevertheless, seeking the help of an IFA (and particularly one that specialises in occupational pension schemes) would make good sense.

It doesnt strictly regulate it but it would expect IFAs to consider the option when looking at it.

A lot of scheme administrators are very worried about giving advice due to fears that they will be liable if the advice turns out wrong (as often its a judgement call rather than an absolute) as to which option will end up best.

So, often you that information is all they will give.