28 years old, NHS Scotland worker pension advice please

doughuelas

Hi All

Recently turned 28 and now getting to the stage of planning for the future

Opted out the NHS Scotland scheme in 2003 when i started part time with the health service (during bouts of being a student etc)

Now i've accepted i will probably stay here i have applied to opt back into the pension

Under current circumstances i will still have 40 years of contributions if i was to retire at 68

The question is -

1. am i doing the right thing? read alot of negative information regarding pensions saying many choose to fill their isa and use SIPPs instead

2. Any advice on overpaying (making additional payments to my pension to the tune of £5k i believe). will it pay dividends? and is the £5k in total or per annum?

3. Should i look into a separate pension plan to run alongside this. if so, any hints on where to research

any advice would be great

D

jem16

doughuelas wrote: »

Opted out the NHS Scotland scheme in 2003 when i started part time with the health service (during bouts of being a student etc)

What a shame you did this as you could still have built up valuable service and would have been under the old and better scheme.

1. am i doing the right thing? read alot of negative information regarding pensions saying many choose to fill their isa and use SIPPs instead

Not when comparing it to a defined benefit pension they don't. You will not even come close to what you are getting with the NHS scheme.

2. Any advice on overpaying (making additional payments to my pension to the tune of £5k i believe). will it pay dividends? and is the £5k in total or per annum?

It's £5kpa but it's also index-linked so would be more when you actually get it.

CLAPTON

very bad decision not to join in the first place

a very good decision to join now

I don't understand your comment on over paying by 5k ... what do you mean; what the the conditions for this?

jem16

CLAPTON wrote: »

I don't understand your comment on over paying by 5k ... what do you mean; what the the conditions for this?

I'm assuming the OP is thinking of Additional Pension but I'm not entirely clear that he quite understands it.

http://www.nhsbsa.nhs.uk/Pensions/2660.aspx

atush

Glad you have seen the light, join tomorrow.

Can't say of overpaying is good for you. Could be, but there are other considerations like, do you hve 6 months spending saved in cash? do you have a spouse or dependants? A home/mtg? Savings and investments not n cash? Some of hese answers may have an impact on where you should save extra cash.

doughuelas

jem16 wrote: »

I'm assuming the OP is thinking of Additional Pension but I'm not entirely clear that he quite understands it.

http://www.nhsbsa.nhs.uk/Pensions/2660.aspx

Many thanks for the replies, yes i am a bit gutted now!

But back in the day the NHS was never even in my mind as a career path! The economic climate has however made me thankful to even be in employment

jem16 you are correct in your assumption that I am thinking of Additional Pension and you would be correct again that i do not quite understand it!!!

would i be right in thinking it is extra payments that i make alongside my pension (but it does not go into my pension pot) that would allow me to add £5k to my pension per annum for when i retire

and it is considered a worthy exercise providing i live 15 years beyond retirement?

thanks again

doughuelas

atush wrote: »

Glad you have seen the light, join tomorrow.

Can't say of overpaying is good for you. Could be, but there are other considerations like, do you hve 6 months spending saved in cash? do you have a spouse or dependants? A home/mtg? Savings and investments not n cash? Some of hese answers may have an impact on where you should save extra cash.

Hi

- In a long term relationship and hope to buy a house summer next year
- No dependants
- £30k in Isa's
- £12k tied up in my grans house as i paid her mortgage off for her (will get this sum back when she unfortunately passes away)
Will be completely debt free by the end of this year (including student loans etc)

So will have a clean slate

My other half is self employed however so i am always conscious of squirreling money away in case she gets ill or we decide to have kids

thanks

atush

If 30K is enough for a deposit and a safety cusion then you could put more into pension. But I suspect you will need more cash now for your deposit and safety buffer as you cannot count ont he 12K.

So save hard outside and obth of you fill your ISAs (cash first) and use intant access, regular saver or time deposits unti you have enough.

doughuelas

atush wrote: »

If 30K is enough for a deposit and a safety cusion then you could put more into pension. But I suspect you will need more cash now for your deposit and safety buffer as you cannot count ont he 12K.

So save hard outside and obth of you fill your ISAs (cash first) and use intant access, regular saver or time deposits unti you have enough.

Many thanks for your help

So in your opinion it would make sense at this stage to take up the additional pension scheme?

Ive read so many previous posts over the weekend that the info is all blurring together!

thanks

hugheskevi

You may want to consider personal pension contributions instead of Added Pension contributions.

The implicit rate of return offered by Added Pension is similar to that offered by quite conservative investments. Being young, and having a Defined Benefit scheme already, you may take the view that you would do better from taking investment risk.

Added Pension tends to be great for those close to retirement, but not as good for those a long distance from retirement.

doughuelas

hugheskevi wrote: »

You may want to consider personal pension contributions instead of Added Pension contributions.

The implicit rate of return offered by Added Pension is similar to that offered by quite conservative investments. Being young, and having a Defined Benefit scheme already, you may take the view that you would do better from taking investment risk.

Added Pension tends to be great for those close to retirement, but not as good for those a long distance from retirement.

Thanks, i'll take that onboard. I am mindful of the fact that back in the day you were able to buy additional years pension, that was then scrapped for the added pension offered currently

With the way things are just now the government may scrap these type of schemes all together?

So best to take advantage of it whilst its going?

thanks