NHS Choice 2 - Stay in 1995 Scheme?

jem16

Oog wrote: »

Nobody has mentioned the effect of the change on the lump sum. That needs factoring in and depends on what your plans are at retirement. I believe it's larger and more commutable in the 1995 scheme.

The 1995 scheme included an automatic lump sum which you have to take. There is no inverse commutation allowed to turn that lump sum into pension.

The 2008 scheme had no automatic lump sum and you had to commute pension to get a lump sum at a commutation rate of 12:1. If you did commute some of the pension to be the same as the 1995 pension then you got the same lump sum.

So no real difference with the lump sum but the 2008 scheme did have the advantage of keeping all the more valuable pension.

Oog

I'm going to look again at my projection but I had thought that the 2008 scheme lump sum, if at the 1995 level of three times pension, severely affected the annual pension amount.
In my circumstances I thought I would prefer the larger lump sum at retirement and a slightly lower annual pension for longer (hopefully), as this scheme would mature at 60 not 68, in my case.

jem16

Oog wrote: »

I'm going to look again at my projection but I had thought that the 2008 scheme lump sum, if at the 1995 level of three times pension, severely affected the annual pension amount.

The main issue lies in when it can be taken as the 1995 scheme has a retiral age of 60 and the 2008 scheme a retiral age of 65. For pure figures based on normal retiral date the 2008 scheme is actually better.

For example £30k finishing salary and 40 years service would see a pension of £15k and a lump sum of £45k in the 1995 section. The same salary and length of service would see a pension of £20k. If you commuted £5k to get back to £15k pension you would get £60k of a lump sum.

The problem comes if you still wanted to take the pension at age 60 as that would be 5 years early for the 2008 scheme and would cause an actuarial reduction.

In my circumstances I thought I would prefer the larger lump sum at retirement and a slightly lower annual pension for longer (hopefully), as this scheme would mature at 60 not 68, in my case.

The retiral age for 1995 section is 60, the 2008 section is 65. Both of these will remain as they are. Anyone wanting their pension at age 60 should stay on the 1995 scheme.

The 2015 scheme will be a CARE scheme and this scheme's retiral age will be your state pension age which is 68 for you. However this doesn't affect when your other benefits can be taken be it 1995 or 2008.

Sister_X

Thanks for the replies.
I think the pension office made a mistake with my friend. I have been back and forth over the NHS pension website and there is nothing about any changes and I believe people in the special classes section ARE fully protected. My colleague and I were 47 in April 2012. If she was not in the special classes then she would get the 'tapered protection' until she was 51.
As to the comment that was written that those who retire early pay the price... I totally agree. I had NEVER considered retiring early until my partner pointed out that the government are always changing the rules and if I worked until I was 67 in the NHS they may well turn around and say 'sorry, no money' and I could end up with less money than if I retired at 55 and took the money and ran!!
Quite frankly I don't trust politicians who give nurses 1% pay rise and award themselves 11%. I appreciate the fact there is no money in budget so why do they get more? I will continue working after 55 but part time if I stay in the NHS. I should be mortgage free at 50 and I am not materialistic so when my state pension kicks in at 67 I should get pensions worth £21k. I can live with that. Many people on zero hours contracts live on a lot less and have rent to pay. I HAVE thought this through. My mum was severely disabled in her 50s and my dad was ill from 61 and died at 66 so I fully intend to enjoy life and get out of the rat race ASAP because I don't want to end up disabled and living with regrets.

butterfly72

jem16 wrote: »

The retiral age for 1995 section is 60, the 2008 section is 65. Both of these will remain as they are. Anyone wanting their pension at age 60 should stay on the 1995 scheme.

The 2015 scheme will be a CARE scheme and this scheme's retiral age willing be your state pension age which is 68 for you. However this doesn't affect when your other benefits can be taken be it 1995 or 2008.

I'm sure I've read that if you do take your 1995 at 60 or 2008 at 65 you can't contribute any further to your 2015. Something to consider if you plan to take your pension and return to work til SPA in the NEW.

jem16

butterfly72 wrote: »

I'm sure I've read that if you do take your 1995 at 60 or 2008 at 65 you can't contribute any further to your 2015. Something to consider if you plan to take your pension and return to work til SPA in the NEW.

You may well be correct. Always worth looking into all possibilities before making a decision.

butterfly72

jem16 wrote: »

You may well be correct. Always worth looking into all possibilities before making a decision.

Even more complicated for me as I'm buying added years which would stop if I moved to the 2008. Yet do I need added years as I'll be working an extra 8 years to SPA anyway?! Wish I could work out the figures for all the possible scenarios.

piersuk

This is a very interesting thread and considerably easier to read that the absolute pages of random words that has been send out by the NHS. I'm sure to the financial advisor's that work in the NHS :undecided it makes perfect sense!
Anyhow, I have worked through the calculator and come up with the below figures. (21/02/2026 will make me just over 55)
I'm 43 and looking at retiring at 55, I know that the pensions not worth much but it will suit my plans.
So can one of clever guys out there help me please.

I'm currently Band 6 and as of 31/3/14 had 17y202d in the pension.
From the below what exactly could I expect to get at 55?

In terms of buying three years pension, at what point could that be made 55, no earlier or only later? Does the contract refer to pension or employment contract?
Thanks - maybe the above explains why the literature sent to me makes no sense :rotfl:

Thanks all!