choice 2 NHS pension.

calicocat

Hi,

Have just had a letter about this as I am according to them on the 'cusp' of which way to go for my benefit.

Am pretty ignorant about pensions other than I know to stay with the 1995 one to be able to retire at 60 and not be tied to the now State pension age...(although any future contributions will only be available at that age from April next year....not what I signed up for!!....but things change and we have to accept that) .

Anyone in my position, 15 yrs working, but potentially 15 yrs left to work :eek: ....in the same field....or i'm wondering whether to stay in an NHS pension regardless of years at all?

I am wondering whether to stop my pension as it will be now based on overall career salary from now on, and whether to invest in something else like isas etc or property, or stay in it. ?

Thoughts anyone.....:o.

kidmugsy

calicocat wrote: »

i'm wondering whether to stay in an NHS pension regardless of years at all?

I am wondering whether to stop my pension as it will be now based on overall career salary from now on, and whether to invest in something else like isas etc or property, or stay in it. ?

There are two advantages to stopping your NHS pension.
(i) At present it will leave more room in the NHS budget for overpaying administrators and managers.
(ii) In future it will reduce the burden on the taxpayer of paying you your pension.

PeacefulWaters

I am wondering whether to stop my pension ... Thoughts anyone

Don't be so bloody stupid.

jem16

PeacefulWaters wrote: »

Don't be so bloody stupid.

Seconded!

Would be the worst financial decision you could make. Nothing would ever come close to what you would be losing.

calicocat

jem16 wrote: »

Seconded!

Would be the worst financial decision you could make. Nothing would ever come close to what you would be losing.

Why? My pension isn't great to be honest, the average 7.8K a year.....if I pay to full term.

I have enough contributions now to cover that due to contributions pain in. After that, it will be average salary (albeit not huge)....

They keep changing the goal posts, I understand it has always been a good deal to be in, but is it now?.

I don't want to be tied to that work for the next 15 years, and who's to say they don't change the goalposts pension wise .....yet again.

However, I do realise I am reacting to a letter etc I don't like, will ponder on it more as I seem to be out voted here:o. Panic reaction maybe...:) i

Thrugelmir

calicocat wrote: »

Why? My pension isn't great to be honest, the average 7.8K a year.....if I pay to full term.

If you want a higher pension then you'll need to save more out of your own pocket. Unsure what you expect in the way of a pension. Nothings for free in this world.

PeacefulWaters

Why? My pension isn't great to be honest, the average 7.8K a year.....if I pay to full term.

Do you want less though?

I don't want to be tied to that work for the next 15 years, and who's to say they don't change the goalposts pension wise .....yet again.

Each change made seems to protect whatever has been accrued.

Any future accrual still gives you guarantees far in advance of what you could expect to achieve by investing the small percentage of your salary that currently buys your pension.

The next point to review is when your employment changes. Not before.

jem16

calicocat wrote: »

Why? My pension isn't great to be honest, the average 7.8K a year.....if I pay to full term.

That all depends on circumstances. Never mind the average - what would you get? Someone on £30k and a full 40 year contribution record would get £15kpa.

I have enough contributions now to cover that due to contributions pain in. After that, it will be average salary (albeit not huge)....

You're obviously going to get more then so why throw it away. Your employer pays around 14% to your pension - opt out and you will lose that contribution plus all the associated benefits. Those benefits are death in service of 3 times your salary plus a 50% spouse pension on death, and an index-linked pension for your life and that of your spouse.

That £7.8k average that you talk about would require a pension pot of £260,000. You say you have that now - what has it cost you?

They keep changing the goal posts, I understand it has always been a good deal to be in, but is it now?.

It has gone from an excellent deal to a very good deal. To get anywhere close to it (and not guaranteed like your NHS pension) you would need to pay in around 25% or more of your salary - how much do you currently pay?

I don't want to be tied to that work for the next 15 years, and who's to say they don't change the goalposts pension wise .....yet again.

Any changes will not affect accrued benefits.

However, I do realise I am reacting to a letter etc I don't like, will ponder on it more as I seem to be out voted here:o. Panic reaction maybe...:) i

Very much a panic reaction. Go and read up on your pension.

jackyann

Do you know what your career average is likely to be?

The NHS is such a huge organisation that it's impossible to generalise, but there are a good number of people who get to the top of their grade and stay at it.

I, for instance, made grade 6 (well, the equivalent back then) when 23 years of age, and I stayed on the same grade until retirement 36 years later (despite , like so many nurses, actually working well above my grade, but that's another story!)

Work it out with a cool head, and ask your union. Good luck

PeacefulWaters

jackyann wrote: »

Work it out with a cool head, and ask your union. Good luck

The cool head is a good idea.

Asking the union? Almost certainly not!

ChumpusRex

The 2015 is still generous compared to open market pensions or investing the money. For most people, it would not be a good idea to stop paying in. Remember, under the 2015 system you DO NOT have to wait until state pension age to claim - you are allowed to retire early, but the pension you get will be adjusted.

As to the choice 2 decision - keep the payments you have already made under 1995 rules, or move to 2008 rules - this depends, to an extent, on your plans.

The 1995 scheme is based on retiring at age 60. You can retire earlier with a reduced pension. However, you cannot retire later for a larger pension.

The 2008 scheme is based on retiring at state age. You can retire earlier with a reduced pension, or retire later for a larger pension.

Remember that your final pension used for calculating both the 1995 and 2008 schemes depends on your pension when you actually retire (best year in your last 3 years - for 1995; or average of best 3 years in your last 10 years for 2008).

As to choice 2, you do need to seek advice - however, it would be worth checking the official website first:
http://www.nhsbsa.nhs.uk/4640.aspx
There is also a helpline available for advice.

You may find the "decision tree" on the web site helpful.