NHS Pension

brightspark364

I have been paying into the NHS pension scheme for the past 6 years and unfortunately will be doing so for another 30 or so years until retirement. With the current pensions climate my colleagues and i have been debating as to the benefits of remaining in the scheme or to withdraw and what options are available. It has been speculated is it worth not having a pension as it is means tested and will likely negatively effect benefits as a pensioner. Clearly we do not know sufficient unbiased information to make informed choices and are unlikely to receive sound advice from pension advisor's who sell pension schemes. Any advice please???

McKneff

You would be absolutely nuts to leave an NHS pension, its one of the best.

Looking to your old age, do you really want to try and manage on a state pension which today for a single person is £102.

Dont be daft, treasure it and guard it with your life.

atush

With the current pensions climate my colleagues and i have been debating as to the benefits of remaining in the scheme or to withdraw and what options are available. It has been speculated is it worth not having a pension as it is means tested and will likely negatively effect benefits as a pensioner. Clearly we do not know sufficient unbiased information to make informed choices and are unlikely to receive sound advice from pension advisor's who sell pension schemes. Any advice please???

You are more likely to get good sound advice from an IFA than you are from your mates or your Union.

Is your pension as good as it was? No. Is it still better than you can do elsewhere? YES!!!! Is it more fair to the rest of the taxpaying public who love the work you do but cannot afford your gold plated pension of days gone by?? Yes.

Should you stay in? YES Can you do better elsewhere? NO

Are you stupid if you opt out? Yes. Are your unions telling you the truth? No.

dunstonh

I have been paying into the NHS pension scheme for the past 6 years and unfortunately will be doing so for another 30 or so years until retirement.

I wish I was so unfortunate to have such a good pension.

With the current pensions climate my colleagues and i have been debating as to the benefits of remaining in the scheme or to withdraw and what options are available.

There is no debate. It is a total no brainer decision. The NHS scheme wipe the floor with any alternatives.

It has been speculated is it worth not having a pension as it is means tested and will likely negatively effect benefits as a pensioner.

Better to stick to facts than to speculate. Means tested benefits do exist. However, they are for the low earners only and it only brings that person up to the breadline. So, if you want to plan to spend 20-30 years in poverty in retirement then go ahead.

Clearly we do not know sufficient unbiased information to make informed choices and are unlikely to receive sound advice from pension advisor's who sell pension schemes.

Comments like this really get on my nerves. Spending £100-£250 with an IFA to be told to stay in the NHS scheme would be money well spent. It would pay for itself tens or even hundreds of thousands of pounds over.

Why is it that the NHS staff seem to have more stupid people and troublemakers working for them than any other profession. It is always the NHS staff that seem to hear these stories and myths.

bendix

I would like to offer a different view, and advise the OP to come out of the NHS pension. By doing so, she will be saving the UK taxpayer a lot of money.

Thank you very much.

jamesd

brightspark364 wrote: »

Clearly we do not know sufficient unbiased information to make informed choices and are unlikely to receive sound advice from pension advisor's who sell pension schemes. Any advice please???

We've been getting quite a lot of questions from public sector employees who seem to have been misled by their union materials. Please treat those materials as what they are intended to be: material to try to get members upset so they will be willing to take industrial action. Don't use it for sensible retirement planning because it's about relative changes, while both the before and after changes pensions are good deals that are well worth paying into.

brightspark364 wrote: »

With the current pensions climate my colleagues and i have been debating as to the benefits of remaining in the scheme or to withdraw and what options are available. It has been speculated is it worth not having a pension as it is means tested and will likely negatively effect benefits as a pensioner.

Some facts to start:

Means testing: the target for benefit income after means testing payouts is about £140 a week, £7280 a year. This is also the proposed sort of income level for a combined flat rate basic and additional state pension that the current government is considering.

State pensions: a youngish worker now can expect to receive something like £7,000-£7,500 a year from a full basic state pension and additional state pension (S2P, formerly SERPS earnings-related pension). Older workers of average or higher income can expect more because the additional state pension part is gradually becoming flat rate.

It follows that those who work a normal career aren't likely to get means tested benefits because they won't have a low enough income to qualify. The means testing is mainly for those who have incomplete contribution records or who just didn't work for much of their possible working life.

Moving on to the NHS or other public sector pensions, these are and will be some of the most generous pensions available to workers in this country. Even after all proposed changes. It would be a poor decision for almost all public sector workers if they were fooled by the current fuss into ceasing paying into the pensions and getting the large amount of matching government value that is added.

Anyone who is concerned about things like later retirement ages should consider doing what private sector employees can also do: pay additional money into a stocks and shares ISA and/or personal pension. These can be taken before any delayed workplace pension scheme:

1. At any time and at any income level or capital draining level from the ISA, making it ideal to support high spending levels for a few years.
2. From age 55 with the amount of income capped by something called the GAD limit, starting at about 5% from age 55, rising as you get older. In addition 25% of the pot can be taken as a tax free lump sum.

These things allow both public and private sector employees to plan for any reasonably achievable retirement age, provided the person is willing to put away the money it takes to get there.

Koicarp

atush wrote: »

Are your unions telling you the truth? No.

The OP doesn't mention the unions, which lies are you talking about?

atush

The information these workers are mulling over in their break times teneds to be given to them by Unions, who have a completely different agenda than actually giving their members good information. I am basing my comments on other PS workers (including NHS ones) who have posted here about so called 'info' from their unions.

I am not doing this to run down Unions, as they do a fine old job of that themselves. I am doing because I believe they are misinforming or not informing their mejmbers toa degree that will actually Harm their members retirement prospects.

I truly understand why they are upset, their pensions aren't going to be as good as they had hoped for. Neither is any of ours int he private sector as when we took ours out, there was penstion tax relief on dividends. But their pensions are STILL and will REMAIN better than they can get in the private sector. Yes, like Bendix we could encorage them (for the sake of the taxpayers) to forgo these benefits. But I cannot in good conscience do this as they will be worse off to do so.

People come here for advice to get themselves in the best position they can be. And IMO, that does not include believing what their unions are telling them about how their pensions are going to be worthless.

jamesd

Koicarp wrote: »

The OP doesn't mention the unions, which lies are you talking about?

We're getting an increasing number of questions from public sector employees who've been given the false impression that their pensions are bad deal, apparently as a result of current union campaigning.

While I can understand why the unions want to get their members upset enough to take industrial action, it's not good for pension planning when it's causing people to think of transferring out of their existing pensions or stop paying into them.

Thicko2

Why do so many posters on here add 2 plus 2 and get 5?

They seem to believe the unions are telling people to leave public sector pensions scheme. Evidence please?

But then again many of these posters struggle with evidence of Hutton.

What the unions are telling their members is the impact of the proposed changes are dramatically reducing their benefits. A fact.

dunstonh

The unions are doing a very poor job of communicating to their members given the number that suddenly want to leave the pension.

Either the communication is poor by accident or on purpose. Given the political position of the unions, it would not be a suprise if it is on purpose.