Afps 75/15

pattojones

Xxxxxxxxxxxxxxxxxxxxxx

hyubh

pattojones wrote: »

My question... given my 'trade' it is likely that i will work in the NHS next. As i will not be able to accrue 30 (35?) years before reaching retirement age can i expect much of an additional pension?

As a member of an armed forces pension scheme you were 'contracted out' of additional state pension (but not the basic state pension - the additional state pension was originally for people who didn't benefit from having an occupational pension scheme to join). Join the NHS and you will be auto-enrolled into the NHS pension scheme, which is a good 'defined benefits' one, and also contracted out.

However, contracting out is soon to be abolished; when that happens, in return for a slightly higher rate of NI you will accrue both an NHS pension and an element of additional state pension. Technically the latter will form part of the new 'flat rate' state pension which will be reduced pro-rata if you don't have enough years contracted in. However, speaking of 'reductions' makes it sound like people with lengthy periods of contracting out are being hard-done by, when that isn't the case at all (the most ideal position to be in is one in which the individual has benefited from a long period of contracting out with a final salary scheme, then just makes it to 35 years contracting in for a full flat rate state pension after contracting out is abolished).

OldBeanz

The forces pension is in the top 1% of pensions and the NHS pension scheme will be in the top 10%. Join the NHS scheme. You will be lucky not to be paying 40% tax when retired.
Your main consideration will be when you want to retire and to be maxing out on ISAs and other legal tax schemes to ensure you can live in the style you want before drawing your state and NHS pensions.

pattojones

Xxxx xxxxxxxxxxxxxxx

OldBeanz

Your max total income will be £47k. Only £6k of that will be taxed at 40% which you can pay into a Personal Pension which you can draw at any age from 55 (although that age is going up).
The minimum years to get a NHS pension will be about 2 and the maximum will be 45ish years. You will be somewhere in the middle and will be able to draw the pension at retirment age or earlier with reduction. You can use your PP to top up your income while waiting for your NHS pension if you intend retiring before 70.

System

If you take no action, Equiniti who now deal with Forces pensions will automatically apply BR to your pension payment when they start paying it.. You will need to speak to HMRC to change this.

kidmugsy

pattojones wrote: »

t if i earn circa £30-35K and an immediate pension of £12K after max commutation i am going to get walloped.

£30k p.a. + £12k p.a. gets you into the 40% band by just a couple of hundred, after your first year when you might also have some services salary to allow for. Lots of people choose to avoid it by contributing to a personal pension of some sort.

You are going to be well pensioned eventually. It's sensible to take an interest but you needn't worry about it.

pattojones

Xxxxxxxxxxxxxxx x