NHS Choice 2 - Stay in 1995 Scheme?

ExMugPunter

This morning my wife has received a letter offering her a final chance to convert her NHS 1995 scheme into the 2008 equivalent prior to the CARE Scheme taking over next year.

We understand that from next year her pension will be accrued in the new CARE Scheme regardless of where she puts her current accrued benefits. However, i want to make sure we thinking straight.

At the time of the first offer of switching schemes, we decided that she would be best to stay in the 1995 scheme. This is because it had a lower retirement age (60 rather than 65). This was deemed important to us because she doesn't think that she can physically do her job (Physiotherapist) when she gets to 60ish. Since a child she has suffered from juvenile arthritis and she believes that the relatively heavy nature of her work will take its toll.

Therefore are we right in maintaining our stance and staying in the 1995 scheme?
Am i correct in thinking that when the new scheme kicks in, she will effectively have 2 schemes and with the 1995 section being effectively, put on hold. (Not sure of the correct terminology protected - deferred - frozen??)

By that I mean that when she gets to 60 she can retire and take whatever she has built up in the 1995 scheme, use an alternative source of income to bridge the gap between 60 and her state retirement age, then take whatever she builds up in the CARE scheme. Is this thinking correct?

jem16

ExMugPunter wrote: »

By that I mean that when she gets to 60 she can retire and take whatever she has built up in the 1995 scheme, use an alternative source of income to bridge the gap between 60 and her state retirement age, then take whatever she builds up in the CARE scheme. Is this thinking correct?

It appears that she can do this, yes.

This might help in your decision but I would say if your wife feels she will definitely retire at age 60 then she should stay in the 1995 section.

http://www.nhsbsa.nhs.uk/Pensions/4330.aspx

xylophone

Might she need to take retirement on grounds of ill health?

ExMugPunter

xylophone wrote: »

Might she need to take retirement on grounds of ill health?

Hopefully it won't come to that.
Her actual health is Ok. But yes, I guess that is something to bear in mind and take a look at.

ExMugPunter

jem16 wrote: »

It appears that she can do this, yes.

This might help in your decision but I would say if your wife feels she will definitely retire at age 60 then she should stay in the 1995 section.

http://www.nhsbsa.nhs.uk/Pensions/4330.aspx

Thanks Jem, I had read some of the links on their website, but not seen that for some reason.

jem16

ExMugPunter wrote: »

Thanks Jem, I had read some of the links on their website, but not seen that for some reason.

I am assuming that she does not qualify for protection - ie she was not at least 47 on April 6th 2012?

ExMugPunter

jem16 wrote: »

I am assuming that she does not qualify for protection - ie she was not at least 47 on April 6th 2012?

She is under 47 - so I don't think she qualifies for any protection.

System

I'm in a similar boat - not had my choice 2 pack yet, but chose last time to stay in the 1995 section.

Basically if you plan to retire before 62 (or leave NHS before retirement), stay in the 95 section. If you plan to stay until at least 64, you are better off in the 2008 section. Between these ages there isn't much in it. Thats purely financial as the 2008 section is more flexible for retirement (95 section final salary is based on the best salary from final 3 years of employment, 2008 section it is the average of the best 3 consecutive years in the last 10 years of employment. There are other slight differences).

My wife and I have no intention whatsoever of working to SPA and I will be staying in the 95 section and will put provisions in place to bridge some of the gap until draw the CARE scheme pension. However will need to draw this early and suffer a penalty as my SPA is 68 (currently!). I believe there is a provision in the new CARE scheme to pay extra pension contributions which will reduce the penalty if draw it early (I think 3 years or to age 65 is the most can reduce it to). I might look into that but will depend on costs of course.

ExMugPunter

Thanks Teepee.

Your explanation is pretty much exactly as they suggest in the pack received today.
We always had half an eye on this, but its nice to see that we have interpreted it correctly and our original decision is still the correct one.

At least we know what we are looking at now and can adjust our current plans if need be. But as we are still around 25ish years away from retirement there is plenty of time for that to change!!

saucer

ExMugPunter wrote: »

By that I mean that when she gets to 60 she can retire and take whatever she has built up in the 1995 scheme, use an alternative source of income to bridge the gap between 60 and her state retirement age, then take whatever she builds up in the CARE scheme. Is this thinking correct?

I usually read a lot more than I write here but felt compelled to answer here. My assumption/understanding is that the 2015 scheme that we will all be enrolled in (if you don't have protection because of age) will be a single pension with combination of the new and the 1995 and or 1998 scheme benefits built up before 2015. You can then only retire once, that is your pension when you take it, whether this is 60, at 68 or any other age will be a combination of two or even three calculations, but all taken at the same time.

On looking at the NHSBSA website I realise I was wrong and that you can retire, take your pre 2015 benefits and then chose either to take reduced 2015 benefits (because you are leaving before the SRA) or delay taking these until SRA. That has helped me be a bit clearer about the rules.

JPG82

Hi, my wife and I have just received our choices to move from 1995 scheme to 2008.

Bit of background we both have 10 years pension built up already. We both intend on staying in nhs however my future not as secure as wife's with private tendering etc (I may also move from nhs In near future to private).

Also my wife made it up to a band 7 quite quickly (CARE should be good for her) whilst I've slowly risen up the band 6 ranks.

Our plan was to purchase the extra 3 years we can (taking full pension at 65) however leave work around 62 and live off private investments that we started little over a year ago. (Hopefully).

That being the case would we be better in 1995 or 2008. I feel from what I've read 2008 may be better? However any advice that could get us retired earlier would be welcome. Thanks