choice 2 NHS pension.

calicocat

Thrugelmir wrote: »

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.

I do this anyway.

ChumpusRex wrote: »

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.

Thanks, I know i'm better off staying with the 95 pension as want to retire before state age. Or at least from this job anyhow.

Will have a look at the website again and ring them for a forecast to be sent out.





There must be lots of us fools about however, as lots of us are thinking of ditching it and paying that money into a second mortgage instead.

kangoora

calicocat wrote: »

There must be lots of us fools about however, as lots of us are thinking of ditching it and paying that money into a second mortgage instead.

Well, there is one sayng that comes to mind 'A fool and his/her money are soon parted'. Turning down all the death in service benefits, spousal pension, employer contributions (sic) and 'guaranteed' income at the end when you retire, for a punt on a BTL would, to most people on here, be insane. When you say you are in the NHS, it wouldn't happen to be a resident of one of the psychiatric wards? That was tngue in cheek but the concept is the same.

If you really want a BTL then do it with 'spare cash' after you've made sure of your 'guaranteed income'. Even then, most people would recommend you pay into a 2nd personal pension. When you decide to retire you could then draw down out of your personal pension to cover the years between retiring and the date you can draw your NHS pension so you don't take any early pension reductions (actuarial) on your main pension.

£7.8k seems a bit low for 30 years service but does depend on your current wage, I'm not sure if this is an 80th or 60th scheme - but even working on 80ths, 7.8 x 80/30 = 20.8k (so you currently earn £20.8k?). Say you get a promotion to around £25k, your pension jumps up to £9.4k (£25k/80 x 30).

fred246

I was speaking to a nurse recently. She has just got a Land Rover Evoque on a NHS salary sacrifice scheme. She has to pay £500 a month for next 3 years. I thought knocking £6k a year off your salary which will be part of the career average pension scheme sounded a bit nutty. When I asked her she said she didn't care because the car 'turns heads'. Anyone any thoughts?

Linton

fred246 wrote: »

I was speaking to a nurse recently. She has just got a Land Rover Evoque on a NHS salary sacrifice scheme. She has to pay £500 a month for next 3 years. I thought knocking £6k a year off your salary which will be part of the career average pension scheme sounded a bit nutty. When I asked her she said she didn't care because the car 'turns heads'. Anyone any thoughts?

Does that really work? The point about salary sacrifice is that it transfers a cost from you to your employer. With a pension payment the employer can pay into your pension without any tax implications. In this case surely the Evoque would become a "company car" and so subject to taxation as extra income.

Koicarp

[/QUOTE]£7.8k seems a bit low for 30 years service but does depend on your current wage, I'm not sure if this is an 80th or 60th scheme - but even working on 80ths, 7.8 x 80/30 = 20.8k (so you currently earn £20.8k?). Say you get a promotion to around £25k, your pension jumps up to £9.4k (£25k/80 x 30).[/QUOTE]

But won't she will only have 15 or 16 80ths rather than 30, with the remainder 60ths in a career average scheme?

kidmugsy

calicocat wrote: »

There must be lots of us fools about however

It's the NHS, innit?

ChumpusRex

Linton wrote: »

Does that really work? The point about salary sacrifice is that it transfers a cost from you to your employer. With a pension payment the employer can pay into your pension without any tax implications. In this case surely the Evoque would become a "company car" and so subject to taxation as extra income.

That's exactly right. Under this type of scheme, you pay BIK on the company car. Fine if you've got some sort of hybrid thing, but a LR evoque carries a 20% BIK rate per year (i.e. £5k of taxable income).

The main saving to the employee is the tax/NI/pension savings. In general, I've found the list prices to be uncompetitive with the general leasing market, but the tax changes result in a net saving for most people, and most cars. There is also apparently a VAT dodge (in that the cars in this type of scheme are VAT exempt due to a loophole) so you do have to wonder just how fat the lease companies' margins are.

It's a tough call as to whether it is a good idea or not - with the final salary pension scheme, as long as you weren't close to retirement, there is no real cost to reducing your contributions. But once the career average scheme comes in, it's starting to look unattractive.

I understand that the NHS car scheme is unlikely to last long, as HMRC are trying very hard to get the VAT dodge shut down, which once combined with the pension changes, would basically kill it.

misswoosie

Forget pensions, use what you would contribute to NHS pensions to start building up a portfolio of rental properties. And don't forget that you can take your 1995 NHS pension (albeit reduced) from the age of 50. If you do this , you can still return to working for the NHS (perhaps at a lower grade with less responsibility) part time. I had 28 years of contributions, although I worked part time (3-4 days) for the last 14 years after having family, so I only have 22 years FTE. For 6 years of those I did 24 hr emergency on calls ( between 40 and 100 hrs a month) but they don't count as don't the heaven knows how many years of unpaid overtime we all work). I left the NHS and the scheme in 2009 age 47 to move abroad. I am now 53 and taking my deferred benefits. My final salary ( full time) in 2009 was £32,000 as a Clinical Nurse Practitioner (Band 7). I will get (if they ever get it to me, the due date was yesterday, I applied in February, had no correspondance at all from them and the telephone lines are closed today "due to unforseen circumstances") approx 30k lump sum and approx £500 per month. That's taking the higher lump sum option. I could have had £22k and £600 per month. I calculated that it wasn't worth me waiting any longer to take my pension. Yes , if I waited until 60 (7 years longer) I would get around 50k and £750 per month. Considering the state of the Govt and the NHS I don't trust them, and looking at how they've dealt with my pension application and that it's not been paid on time, I think I made the correct decision.

bigadaj

misswoosie wrote: »

Forget pensions, use what you would contribute to NHS pensions to start building up a portfolio of rental properties. And don't forget that you can take your 1995 NHS pension (albeit reduced) from the age of 50. If you do this , you can still return to working for the NHS (perhaps at a lower grade with less responsibility) part time. I had 28 years of contributions, although I worked part time (3-4 days) for the last 14 years after having family, so I only have 22 years FTE. For 6 years of those I did 24 hr emergency on calls ( between 40 and 100 hrs a month) but they don't count as don't the heaven knows how many years of unpaid overtime we all work). I left the NHS and the scheme in 2009 age 47 to move abroad. I am now 53 and taking my deferred benefits. My final salary ( full time) in 2009 was £32,000 as a Clinical Nurse Practitioner (Band 7). I will get (if they ever get it to me, the due date was yesterday, I applied in February, had no correspondance at all from them and the telephone lines are closed today "due to unforseen circumstances") approx 30k lump sum and approx £500 per month. That's taking the higher lump sum option. I could have had £22k and £600 per month. I calculated that it wasn't worth me waiting any longer to take my pension. Yes , if I waited until 60 (7 years longer) I would get around 50k and £750 per month. Considering the state of the Govt and the NHS I don't trust them, and looking at how they've dealt with my pension application and that it's not been paid on time, I think I made the correct decision.

Quite stupid and ignorant advice, which should be ignored.

Any public sector scheme is very valuable, and far better than virtually anything available in the private sector.

Buy to let is a business, with risks and potential large losses. Recent change have also made it far less attractive and efficient in tax terms for most people.

Can you still get the daily mail where you are now?

Andy_L

This is an 18 month old post & the decision date has long passed