NHS 2015 Scheme Early Retirement Buyout - good value?

karlos_the_jackal

I've just received details of the 'Early Retirement Reduction Buyout' scheme for the NHS 2015 Section, the factsheet of which is available here.

This allows you to shave up to 3 years off your NRA in return for extra contributions. For example someone aged 40 with an NRA of 67 can contribute an extra 3.99% to retire at 64 with the same benefits.

Does this seems good value and how does it compare with contributing to AVCs and taking the 5% per year hit of retiring early?

misswansea

This is exactly what i've been trying to work out

first you haven't noticed the scheme only allows you to buy your way down to retiring at 65, any younger and there will be actuarial reduction of approx 5% per year early (cannot for the life of me find where they hide the actual numbers for this)
of course the NPA will rise with any State pension aage rise. (sigh)

I'm 41 and would like to retire at 60 so have been looking at buying 2 years to reduce the actuarial reduction on the 2015 section of my pension from 35% (OUCH) to 25% (ouch)

my back of the envelope method (no tax relief or predicted pay rise figurings and all figures in todays money - its a small envelope) suggests that if I pay an extra £954 a year for the next 19 years I can expect an extra £1300 pa in retirement.
so I will have to live till at least 74 to profit.

Not convinced i wouldn't be better off putting that £954 in separate private pension to build a flexible pot to help cover the gap between "early" retirement at 60 and state pension at 67 (if it still exists by then)

Anyone got an idea which is best

also can anyone find the figures for how much it costs to buy "Additional pension" in the NHS 2015 scheme as this could also be an option for us.

Thanks