NHS Pension worth it?

wonderpupp

I am 30,
married, child free. (But 2 dogs, few chickens and a pair of ducks - kind of living the good life, but still have to work to pay the rent n bills, you know? )

No pension, few savings, no debt, rent house with my husband, living comfortably.

Been offered a job with the NHS, and thus offered NHS Pension.

Is it worth it, as by the time I get there, retirement age will be 68-70 at the rate we're going, and I doubt with my medical history and family med history I'll make it past 65...

So is it worth it, or just stick the money into an ISA?
If I don't join the pension, I'll have an extra £140 a month in my pocket, which I would put into my ISA. (Or save up for another motorbike..?)

System

Check the details of the NHS pension before dismissing it.

What percentage contributions does the employer make into the scheme for you ? (This is like free money when you retire)

What age can you retire at and start receiving the NHS pension ?
(I assume this does not have to be the same as the state retirement age, but you would need to confirm.)

You never know what advances will be made in medical research over the next 30 years or so, how would you survive on the proceeds from ISA accounts if you did not have a pension too.

A pension is an insurance policy which guarantees you an income after retirement, for the remainder of your life. When you think of it like that, it is a really cheap insurance policy.

bendix

wonderpupp wrote: »

I am 30,
married, child free. (But 2 dogs, few chickens and a pair of ducks - kind of living the good life, but still have to work to pay the rent n bills, you know? )

No pension, few savings, no debt, rent house with my husband, living comfortably.

Been offered a job with the NHS, and thus offered NHS Pension.

Is it worth it, as by the time I get there, retirement age will be 68-70 at the rate we're going, and I doubt with my medical history and family med history I'll make it past 65...

So is it worth it, or just stick the money into an ISA?
If I don't join the pension, I'll have an extra £140 a month in my pocket, which I would put into my ISA. (Or save up for another motorbike..?)

Yeah, it's a much better idea to forget about a boring thing like financing your retirement years, when you can buy a motorbike now instead.

Dunno why you bothered to ask the question, really

CAN1976

Also the death in service benefits may be worthwhile. I know that that feature of my pension is something that I find comforting, knowing that my family will have a nice lump sum if the worst happens to me.

getmore4less

Look beyond just the pension,

I think the NHS death in service benifit is linked to the pension

If you think you might not make it that woud be a windfall for the family.

Also the long term disability/ill health retirement which you also may benifit from.

A guess,
£140pm net change, so in the 6.5% contribution range, a salary of around £38k.

dunstonh

Is it worth it, as by the time I get there, retirement age will be 68-70 at the rate we're going, and I doubt with my medical history and family med history I'll make it past 65...

What makes you think the retirement age is 68-70?

1 in 5 dont make retirement. Playing those odds is risky. What about the spouse if one of you dies?

No pension, few savings, no debt, rent house with my husband, living comfortably.

You live comfortably because you work. Skip to retirement when you are paying rent and have no earned income coming in. The basic state pension is £5000 a year. How comfortable will you be on that?

So is it worth it, or just stick the money into an ISA?

For every £1 you pay for the NHS pension, you would need to pay around £15 in an alternative (such as ISA and life assurance) just to get the same benefits.

If I don't join the pension, I'll have an extra £140 a month in my pocket, which I would put into my ISA. (Or save up for another motorbike..?)

No you wont. Your tax and NI will be higher. It will be closer to £110 take home. So, for £110 net contribution you would need to put around £1650 in the ISA and life assurance to get the same level of benefits.

bilbo51

dunstonh wrote: »

So, for £110 net contribution you would need to put around £1650 in the ISA and life assurance to get the same level of benefits.

I've never seen the benefits of the NHS scheme put in such starkly gobsmacking no-brainer attractive terms before. Simply stunning post.

CAN1976

Also check with the pension administrator when retirement age is. I am 35, my state pension age will be 67, but the retirement age for my work pension is still 65.

dunstonh

bilbo51 wrote: »

I've never seen the benefits of the NHS scheme put in such starkly gobsmacking no-brainer attractive terms before. Simply stunning post.

It actually could be a lot more than that which is even more surprising. I input the following into pension software:

Salary of £38,000
target pension of 43.75% of final salary (35/80ths = 35 years of service)
inflation 2.5% p.a.
Base growth rate 0% (as NHS is guaranteed, I used cash as investment option and gave a growth rate of nil to reflect that savings tends to be in line with inflation - so no real terms growth)
To age 65 starting at age 30.
annuity rate using 3% indexation and 50% spouse.

In that scenario, a contribution of £1908pm would be needed (increasing annually NAEI)

The NHS pension on £38k salary would with a 6% contribution (not sure of current rate off the top of my head) which would be £190pm gross (£152pm net of basic rate tax)


We dont know the income of the OP. It sounds like it is in the 30k range given the contribution level. However, you can see the sort of ratio that exists and can easily compare it.

Old_Slaphead

dunstonh wrote: »

.

In that scenario, a contribution of £1908pm would be needed (increasing annually NAEI)

Seems a bit steep!

To pay a pension of around £17k at 65 would require a pension fund of around £300k ??

Contribs of £1908pm over 35 years, excluding growth & inflation, should achieve substantially more (£1908 x 12 x 35 = £800k)

kidmugsy

Can I just speak up for the taxpayer? Forget the pension, dear: go for the motorbike.