NHS pension vs SIPP

investm0ney

Hello there,

I am a relatively new NHS employee who is currently contributing 9.5% of salary into the NHS pension scheme. I have currently been contributing for 15-16 months. I am under the impression that I am able to withdraw my contributions within 2 years of signing up with no penalty.

I have recently been informed of SIPPs by a colleague and am currently learning as much as possible to try and determine what will be the most sensible option in the long run - the NHS pension scheme or a SIPP. I was wondering if anyone had any particular advice or insight into these two options? It would be greatly appreciated.

bigadaj

Stick with the nhs, you'd have to contribute much larger sums to get anywhere near the same benefits when it comes to retirement.

The advantage with a personal pension or sipp is flexibility in being able to take it, current rules suggest this would be 10 years before state pension age, and also almost certainly before you could take your nhs pension unreduced.

Ideal world would be to contribute to sipp or personal pension as well as, rather than instead of, nhs pension, though there are many other calls on your money it would soemthing you would be happy with in a few decades time.

atush

dont be stupid. And no I am not being mean.

Keep into the NHS. Sure you c an get your money back, but you'd pa tax and NI on it so would get back half?

Then you'd be flushing the employers contrib down the tilet.

Keep in the pension, keep paying in as long as you can

JoeCrystal

The most sensible option is to stick with NHS pension scheme with its death in service benefit, ill-retirement option, all the risk on the employer and excellent pension (and knowing what the pension income most likely to be) with no risk on your behalf. SIPP fares very poorly in comparison.

justme111

When I done some approximate calculations (you can not make the exact ones as SIPP's results are unknown depending on performance) I concluded NHS pension is at least as good as expected return on SIPP EVEN in case of taking it early with actuarial reduction. Why would you want hassle of managing it , forgoing perks and possibly getting less at the end ?

dunstonh

I am under the impression that I am able to withdraw my contributions within 2 years of signing up with no penalty.

There is a penalty. You don't get the employer paid for benefit. What you get back will be around 10% of the pension value if left.

I have recently been informed of SIPPs by a colleague and am currently learning as much as possible to try and determine what will be the most sensible option in the long run - the NHS pension scheme or a SIPP.

You are paying 9.5% into the NHS pension. If you paid around 25%-30% into the SIPP then you would get around the same benefit as the NHS pension.

I was wondering if anyone had any particular advice or insight into these two options?

It would be stupid to leave the NHS scheme and start a SIPP in its place.

jnaylor22

Completely agree, cannot stress how much better the benefits of the NHS pension scheme are compared with a SIPP.


STAY IN THE NHS SCHEME!