Tax on nhs pension

quotememiserable

trickydicky14 wrote: »

I also have a modest NHS pension that is due to pay out in one years time as I will be 60, regarding bigger lump sums you talk a lot about, “ Commutation rate may not be advantageous, and dire commutation rate of 12:1” So if I am not desperate for the money you feel I should keep a higher monthly pension and a smaller lump sum ?

That's what we're saying, yes. Let's say you take £12000 cash insteand of £1k per year pension. If you live to average age, that's 22 years. In that time not only would you have collected £22,000 in pension, it would have been index linked as well (ie, go up with inflation). Of course you could invest your £12k and earn some interest, but never enough to make £1k per year index linking. Really, the only reason to take the cash is if you need it to pay off your mortgage or card debts or something.

trickydicky14

quotememiserable wrote: »

That's what we're saying, yes. Let's say you take £12000 cash insteand of £1k per year pension. If you live to average age, that's 22 years. In that time not only would you have collected £22,000 in pension, it would have been index linked as well (ie, go up with inflation). Of course you could invest your £12k and earn some interest, but never enough to make £1k per year index linking. Really, the only reason to take the cash is if you need it to pay off your mortgage or card debts or something.

Thank you so much for that what you and others say makes it very clear. I don't need the extra cash and i feel i am in good health so my mind is made up.

trickydicky14

Could I take this conversation the other way and ask, is it possible under the 1995 section to take your NHS pension without any lump sum and boost your monthly pension payout ? I think I know the answer but no harm in asking.

Thanks Trickydicky14

smileygill

Hmm. A colleague heard exactly the same story, but nobody could identify a source. I searched but could find no substantiation for the claim, and indeed she later saw an IFA, who confirmed the "50%" story to be completely fictional. I wonder if this is widespread or if your dad and my colleague work in the same place and heard the same rumours. We're at a Foundation Trust in NW England. Is your dad in that area?

DancingBadger

trickydicky14 wrote: »

Could I take this conversation the other way and ask, is it possible under the 1995 section to take your NHS pension without any lump sum and boost your monthly pension payout ? I think I know the answer but no harm in asking.

Thanks Trickydicky14

I asked the NHS Pension Helpline exactly the same question only last week - and as you correctly surmise, the answer, unfortunately, is no.

pollyanna24

smileygill wrote: »

Hmm. A colleague heard exactly the same story, but nobody could identify a source. I searched but could find no substantiation for the claim, and indeed she later saw an IFA, who confirmed the "50%" story to be completely fictional. I wonder if this is widespread or if your dad and my colleague work in the same place and heard the same rumours. We're at a Foundation Trust in NW England. Is your dad in that area?

My dad works in a hospital in London, so that's quite a distance for a rumour to travel. Wonder where it all started!

pollyanna24

My mum has told me that my dad has a meeting to go to the "pensions lady" on 15th May and he is stressing because mum can't go with him.

It has been decided that as both me and dad work in London, that I will go with him before I start work.

I'll just sit in and listen and try not to get involved. I just know if dad goes by himself, he'll get it all wrong when he tries to relay back to us what the lady said.

All I am going to ask her about is where this 50% figure came from.

jem16

pollyanna24 wrote: »

All I am going to ask her about is where this 50% figure came from.

Should be an interesting answer. Do keep us updated.