NHS PENSION ADVICE ?.....please

christabelle23

I'm 60 in December this year and have been paying into nhs pension only for 12 years. I have worked out lump sum which is roughly about £34,000 with a small pension of around £6000 per year. I don't get my state pension until I reach 66. I hope to retire in 2017 and do a couple of agency shifts as and when I need to. My husband is already retired and has a good pension but no state yet either.

I have an old pension lying with Aegon which is worth around £25,000.

What I would like to ask please is this.....when would be the best time to take my lump sum from Aviva without being penalised with tax.If I took it at same time as I retired would I be taxed at 40% and is it only my nhs lump sum thats £30,000 tax free.

I'm not very good at finances etc. I have no debts though and mortgage is paid off.

I was hoping to invest some of the money and supplement my pension with some too.


Some advice would be greatly appreciated thank you

My earnings last year were approx £32,000.

atush

When will you take your NHS pension? At scheme age, or early/reduced?

The BEST time to take the aviva pension would be in april after retiring from your NHS job (but not taking the pension yet) and taking the 25% TFLS and then drawing up to your personal allowance tax free. Then take the remainder using your PA the following year?

christabelle23

It will be scheme age, which is 60. If I go in April 2017 I will be 61 plus.

Pension is with Aegon not Aviva as I previously stated !

xylophone

You are in the 1995 section?


You intend to work beyond Scheme NPA?

http://www.nhsbsa.nhs.uk/Documents/Pensions/SD_Guide_(V14)_online_04.2015.pdf

Page 18 seems relevant?

Regarding your Aegon pension https://www.pensionwise.gov.uk/

What options does Aegon offer regarding this pension?

Re new state pension, have you requested a statement?

https://www.gov.uk/state-pension-statement

https://www.gov.uk/new-state-pension/overview
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf



Have you requested a new state pension statement?

atush

So I would wait and take the aegeon pension in april 2017 when you have no salary just your NHS pension. Then take your 25% TFLS, and draw down the rest more slowly. AS and when needed.

You may have to transfer is Aegeon doesn't allow DD?

If you have considerable savings, I would suggest you bump up your Aegeon pension this year while you still have income.

jem16

christabelle23 wrote: »

I'm 60 in December this year and have been paying into nhs pension only for 12 years. I have worked out lump sum which is roughly about £34,000 with a small pension of around £6000 per year.

Your lump sum seems rather larger than normal as it's normally 3 times annual pension.

Are you taking more than the automatic lump sum? If so this may not be the best decision as the commutation rate is 12:1 which is dire.

christabelle23

The NHS pension calculation is from the SPPA website putting in my own personal details. There are two calcs one for larger lump sum and smaller pension which is the one I was going to go for. The other is in reverse. I can't transfer the benefits of Aegon one to NHS anymore. I probably should have done this years ago, but hindsight is a wonderful thing etc etc. My aim is to roughly £1000 per month income to be able to have £500 for bills etc and the same for personal use.

Should I seek advice from financial advisor or not ? I have two cash Isas with about £15000 in total in them. As I said before I am not very up on the minefield of finances and the last advisor who transferred my old pension into the Aegon one was (in my opinion) a chancer who was just out to make commission and he knew that I hadn't a clue !!!

I have had state pension statement which gives me the grand sum of £117.00 when I'm 66 !

I'm a nurse in ICU and I've had enough of the NHS now and am so eager to get out to be honest.

jem16

christabelle23 wrote: »

The NHS pension calculation is from the SPPA website putting in my own personal details. There are two calcs one for larger lump sum and smaller pension which is the one I was going to go for.

I would go with just smaller lump sum ( ie if there is an automatic one) with the larger pension unless you are in poor health or have a specific need for a larger lump sum. The index-linked pension is far more valuable than anything you could do savings/investment wise with the lump sum.

Had you anything specific you wanted to do with the lump sum or are you in poor health?

What figures do you have for a smaller lump sum and larger pension?

Should I seek advice from financial advisor or not ? I have two cash Isas with about £15000 in total in them.

It's up to you if you feel you need advice although the amounts you're talking about are not really IFA territory.

Atush has given you some good pointers about taking some from the Aegon pension each year to supplement your NHS pension. There's no need to take it all at once and pay unnecessary tax on it. You could have income tax-free up to the personal allowance and a bit extra if you want to have around £1k per month.

I have had state pension statement which gives me the grand sum of £117.00 when I'm 66 !

Assuming £117pw that seems ok.

jem16

christabelle23 wrote: »

I'm 60 in December this year and have been paying into nhs pension only for 12 years. I have worked out lump sum which is roughly about £34,000 with a small pension of around £6000 per year.


My earnings last year were approx £32,000.

Based on a final salary of £32k and assuming you are in the 1995 section - the calculation would be 12/80ths of £32k. That would give an annual pension of £4800 plus automatic lump sum of £14,400.

I'm struggling to get your figures - have you more than 12 years service?

xylophone

http://www.sppa.gov.uk/Documents/NHS/NHS%20Guides%20and%20Forms/MEMBERS%20GUIDES/NHS%20Scheme%20Guide%201995%20Section_15102012.pdf

This is your booklet?

brewerdave

I was somewhat startled by your calculated pension too; as per jem16 I came up with a pension of £4800 and a lump sum of £14400.
My wife has slightly more service and a lower salary and is only expecting to get ~£4000 pa when she finishes later this year.