Leaving NHS, have >2 years pension - cash or transfer?

jac89

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Hi,

I appreciate any advice you may have for me!

I opted in to the NHS pension around 1 and a half years ago, but have now found a job outside of the NHS doing something completely different, in the private sector. (With a better salary).

I am aware that I can cash out my pension and possibly transfer. I'm uncertain whether:
1- I should be able transfer into the pension scheme offered at my new employers?
2 - Whether transfering my funds into this pension scheme would be worthwhile? I'm skeptical about pension schemes offered privately and I only signed up to the NHS one because I appreciated it as a uniquely benifical scheme.
3 - What happens if I choose not cash out my pension, nor transfer it, I.E. Don't touch it until I retire.

I am 24, signed up almost 2 years ago, and earning on average 20k per year beacuse of time out travelling.

I appreciate any informal advice! That's to say I'm aware I shouldn't take any advice given as right/wrong with this kind of thing!

Thanks!

dunstonh

You havent given any figures. However, based on past figures, you would expect hte transfer value to be in the region of 10 times more than the cash value. Therefore making it a no brainer that it should be transferred.

I'm skeptical about pension schemes offered privately

Why?

3 - What happens if I choose not cash out my pension, nor transfer it, I.E. Don't touch it until I retire.

you will probably find that option is not available to you.

xylophone

http://www.nhsbsa.nhs.uk/Pensions/LeavingYourJob.aspx
"Members with less than 2 years' membership can choose a refund of contributions instead of a transfer to another registered pension scheme."

http://www.nhsbsa.nhs.uk/Deferred.aspx

"Members with 2 or more years’ membership, or less than 2 years, with pension rights previously transferred from a personal, money purchase or stakeholder pension, can choose deferral – ie leave benefits in the Scheme for payment when the member reaches retirement age."

Unless you are in the situation described above, it looks as if your options are refund or transfer - in such a position I'd transfer, either to new employer's scheme or elsewhere. http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/

atush

Transfer it. Possibly to your new work pension.

Which I assume you have, and I assume you will join?

Too bad you didn't wait 6 months to get the new job.

jac89

Thanks for the replies.

dunstonh wrote: »

You havent given any figures. However, based on past figures, you would expect hte transfer value to be in the region of 10 times more than the cash value. Therefore making it a no brainer that it should be transferred.
.

Which figures would you need to calculate this? I would estimate to have paid in around £2000 into this, since January 2012. But 3 months ommited due to not working and travelling.

dunstonh wrote: »

Why?
.

Probably because of my lack of understanding to be honest, what are the chances that the amount I end up with will be more than if I invested it myself? Everyone I speak to seems to have been told "my company offers a (particularly) good pension", isnt that too good to be true.

I have trust issues with money, which I consider to be well-founded!

The new pension I'm being offered would be me contributing say 3% and workplace adding another 6%.

jac89

atush wrote: »

Transfer it. Possibly to your new work pension.

Which I assume you have, and I assume you will join?

Too bad you didn't wait 6 months to get the new job.

Yes I will be joining - its 3% / 6% split me / employer

dunstonh

Which figures would you need to calculate this? I would estimate to have paid in around £2000 into this, since January 2012. But 3 months ommited due to not working and travelling.

The NHS pension scheme provide you the figures in their decision pack. They will tell you the cash refund figure and the pension transfer value.

atush

jac89 wrote: »

Yes I will be joining - its 3% / 6% split me / employer

9% overall sounds low to me. Will they match higher if you put in higher (ie say 5%/10% etc)?

Spirit_2

jac89 wrote: »

Yes I will be joining - its 3% / 6% split me / employer

If you have been earning £20Kp.a your contribution rate to the NHS scheme is 5.3% this year, the NHS employer is putting in 14%.

jem16

Spirit wrote: »

If you have been earning £20Kp.a your contribution rate to the NHS scheme is 5.3% this year, the NHS employer is putting in 14%.

Which is correct. However the OP is leaving the NHS and the figures quoted were for the new scheme.

The OP should definitely look to transfer the NHS pension somewhere as the transfer figure will be very much higher than the refund figure.

jac89

atush wrote: »

9% overall sounds low to me. Will they match higher if you put in higher (ie say 5%/10% etc)?

Yes they offer that too. 3/6, 4/8 and 5/10 all offered.


I think I will probably go for the 15% total option if I can get the small NHS pot I have to be transferred. Seems like the most straightforward decision based on advice from here! thanks