Stopped paying into NHS pension and got taxed?

m33r4

Hi everyone.

The other hand paid into an NHS pension since January 2011. He decided to opt out of this and got a cheque today for an amount minus tax?

Is this right?

jem16

m33r4 wrote: »

Hi everyone.

The other hand paid into an NHS pension since January 2011. He decided to opt out of this and got a cheque today for an amount minus tax?

Is this right?

Yes it is correct as he had been a member for such a short time. He would therefore get a refund of his contributions minus the tax and NI he would have paid had he not been a member.

What were you expecting to happen?

Why has your OH opted out of one of the best pension schemes around?

m33r4

jem16 wrote: »

Yes it is correct as he had been a member for such a short time. He would therefore get a refund of his contributions minus the tax and NI he would have paid had he not been a member.

What were you expecting to happen?

Why has your OH opted out of one of the best pension schemes around?

Thanks for that.

Just didn't expect to be taxed as OH says he was already taxed during the time he was paying into the pension.

So he was really expecting a full refund.

The NHS is changing so much as is everything in our country that the OH has lost trust in establishments to look after our money and give it to us when we reach the age.

The OH also feels that by the time he does qualify for his pension, which is now 67 years of age, he may have snuffed it by then:eek:

McKneff

The pension would have been taken from his gross wage and then the rest would have been taxed and NI's.

As it would have been part of his pay he didnt pay tax or NI on it, now he wants it so he has to pay tax and NI on it

The NHS pension is one of the best to be in, obviosly there must be a reason but it's plain madness to come out of it.

jem16

m33r4 wrote: »

Thanks for that.

Just didn't expect to be taxed as OH says he was already taxed during the time he was paying into the pension.

So he was really expecting a full refund.

The NHS contributions are taken from gross salary before being taxed so he was only taxed on the remainder of his salary and not on the pension contribution.

The NHS is changing so much as is everything in our country that the OH has lost trust in establishments to look after our money and give it to us when we reach the age.

The OH also feels that by the time he does qualify for his pension, which is now 67 years of age, he may have snuffed it by then:eek:

That's likely to be one of the worst financial decisions he ever makes.

For a 5.12% ( after tax relief for a basic rate taxpayer) increase in his pay, your OH has thrown away access to a final salary pension ( soon to probably become CARE but still way better than any alternative), a widow's pension when he does "snuff it" after retiring plus a death-in-service payment equal to 2 x salary.

I would urge your OH to reconsider if the scheme will allow it.

What does he plan to do for retirement?

m33r4

jem16 wrote: »

...I would urge your OH to reconsider if the scheme will allow it.

What does he plan to do for retirement?

Thanks jem16.

He lives for today it seems! I, on the other hand, have been paying into it and will continue to do so as you rightly say it IS the best pension scheme.

m33r4

jem16 wrote: »

....
For a 5.12% ( after tax relief for a basic rate taxpayer) increase in his pay, your OH has thrown away access to a final salary pension ( soon to probably become CARE but still way better than any alternative), a widow's pension when he does "snuff it" after retiring plus a death-in-service payment equal to 2 x salary...

What does happen to the pension in case of death before it's "cashed"?

molerat

I think it is time for another sticky headed "WHATEVER YOU HEAR IN THE CANTEEN DON'T OPT OUT OF A PUBLIC SECTOR PENSION".

molerat

m33r4 wrote: »

What does happen to the pension in case of death before it's "cashed"?

http://www.nhsbsa.nhs.uk/Pensions/SurvivorPensions.aspx

atush

I am afriad your other half has made once of the worst decisons of his life. Simply put, he is mad.

I suspect, he has been listening to his union and maybe the labour party.

The NHS pension, while a little less generous than before, is one of the best anywhere and there is no way (short of buying a lottery ticket and winning a million) that he will be able to do any better anywhere.

Get him to rejoin ASAP.

jamesd

Agree, that was a horribly bad financial mistake. It is and will remain one of the best pensions available in the UK.