NHS Pension

warrior1960

Just need some advice. My wife is a part-time nurse in the NHS. Many years ago she was in the NHS pension scheme (over 20 years ago) and didn't work for several years when we had small children. That money just stayed as a pot in itself that never got topped up. She has just signed up to a new plan within the NHS scheme, but I'm wondering if it's really worth it. She is nearly 48, works just 20 hours a week, but is being deducted £115 per month from her salary, although there has been a corresponding reduction in tax deducted. The pension deducted is based on 9.3% of her gross. We are paying off debts and it has meant a drop in what was going into our bank up to last month. In view of the number of years she has left in the labour market, I'm wondering if its really worth it when we could do with the extra funds, and for what we may or may not actually get when old. I would welcome any advice anyone can give before we decide whether or not to let it continue. Or would we be just as well to cancel? Many thanks

hyubh

warrior1960 wrote: »

Many years ago she was in the NHS pension scheme (over 20 years ago) and didn't work for several years when we had small children. That money just stayed as a pot in itself that never got topped up.

The value of her deferred benefits will have increased by inflation every year, and is guaranteed by statute.

She has just signed up to a new plan within the NHS scheme, but I'm wondering if it's really worth it.

Yes it is.

She is nearly 48

Some time off retirement then.

works just 20 hours a week,

So, she's firmly over 50% full time.

but is being deducted £115 per month from her salary, although there has been a corresponding reduction in tax deducted. The pension deducted is based on 9.3% of her gross.

Comparable benefits in a private pension would be costing her three times that. The contribution rate as an absolute figure may not be low, but it is earning very valuable pension benefits.

In view of the number of years she has left in the labour market,

Quite a few? Especially if the household has debts...

I'm wondering if its really worth it when we could do with the extra funds, and for what we may or may not actually get when old.

As a statutory scheme benefits in the NHS pension scheme are guaranteed by law. What makes you think benefits currently being accrued won't be honoured?

Or would we be just as well to cancel?

Er, no.

jem16

warrior1960 wrote: »

I would welcome any advice anyone can give before we decide whether or not to let it continue. Or would we be just as well to cancel? Many thanks

If she was to cancel, it would rank as the worst financial decision your wife would ever make.

xylophone

She won't be drawing her state pension for nearly 20 years see

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

Wilkins

warrior1960 wrote: »

I would welcome any advice anyone can give before we decide whether or not to let it continue. Or would we be just as well to cancel? Many thanks

Giving up an inflation-linked DB pension would be insane.

warrior1960

Thanks for your replies. I was basically testing the water and you've confirmed the wisdom of us staying in. She has the option of combining it with the one she had over 20 years ago and which has been dormant.

jem16

warrior1960 wrote: »

She has the option of combining it with the one she had over 20 years ago and which has been dormant.

You will need to carefully consider if this is a good idea or not. It may be possible that it's better to leave the two separate.