Small NHS pension, what to do?

fatbeetle

Thanks to information provided by this forum, I looked into whether or not I had any NHS pension from the years I worked for them, (1991 to 2003, with a small break.)

Turns out I have a small fund, which will pay £3463.00 pa and a £10,300.00 lump sum on hitting retirement age, or £3037.00 pa and £9,500.00 lump if I were to take it now. (age 57yrs,)

What would you knowledgeable folk do with this? At present, being fully employed I don't need the money, so how could I save/invest with it for the best outcome?

Caveat, I intend retiring in 2 years time.

Thanks in advance

,

OldBeanz

If you are retiring at 59/60 and think this is a trivial amount then you must have a very good pension provision.

As this is an unfunded Government Defined Benefit pension you cannot cash it in.

Go to an annuity site and work out how much an inflation linked pension of this size with widow(er) provision would cost for a 59/60yo.

Without further information no one can steer you towards the correct decision but drawing your DB pension when it is normally payable is usually the best option. If you are still working then you could pay the money into a PP or SIPP.

fatbeetle

Thank you "OldBeanz", but what "annuity site " would you recommend?

PeacefulWaters

fatbeetle wrote: »

Thanks to information provided by this forum, I looked into whether or not I had any NHS pension from the years I worked for them, (1991 to 2003, with a small break.)

Turns out I have a small fund, which will pay £3463.00 pa and a £10,300.00 lump sum on hitting retirement age, or £3037.00 pa and £9,500.00 lump if I were to take it now. (age 57yrs,)

If you put a cash value to that small fund it would probably be well over six figures.

What would you knowledgeable folk do with this? At present, being fully employed I don't need the money, so how could I save/invest with it for the best outcome?

Doing absolutely nothing with it until you hit scheme retirement age is probably your best bet. I'm assuming that age is 60.

Caveat, I intend retiring in 2 years time.

Will you need this additional lump of income then?

xylophone

If you are retiring at 59/60 and think this is a trivial amount then you must have a very good pension provision.

He joined the Gold Rush to Australia.....:D

https://forums.moneysavingexpert.com/discussion/comment/70721919#Comment_70721919

Set a date of Feb 2018, to fully retire at 59 yrs old. My wife, the jammy... will be 54yrs old on retiring.

The first 6 years we'll be living cautiously on around 265,000 quid pa. After my wife;s super kicks in we'll have around 50,000 quid pato play with.

There seems no point at all in drawing the NHS pension before he needs to.......

jamesd

Since you can't transfer it your best option is probably to wait until the normal retirement age of the scheme and take it then, to reduce the level of actuarial reduction you'd suffer for taking it early.

It won't add much to your anticipated initial quarter million Pound a year income plan but it's something useful to have longer term when it drops back to the £50,000 level.

GunJack

I thought the £265k in the original post was a typo and he meant £25k, when put into context?

atush

If you are still working down under, let it ride til you retire/come back

xylophone

Thanks to information provided by this forum, I looked into whether or not I had any NHS pension from the years I worked for them, (1991 to 2003, with a small break.)

You indicated in earlier posts that you are returning to the UK and that you expect to be eligible to draw the State pension when you reach 66.

Have you obtained a new 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

Is it worth your while checking your eligibility to pay voluntary NI contributions?

kidmugsy

fatbeetle wrote: »

Turns out I have a small fund, which will pay... £3037.00 pa and £9,500.00 lump if I were to take it now. (age 57yrs)

"small": ye Gods, it would cost you more than £100k to buy that on the market.

fatbeetle

Cheers all, some sage thoughts.
It looks like waiting until I reach 60 to draw it down would be the best option.

To answer some points;


Caveat, I intend retiring in 2 years time. ”Will you need this additional lump of income then?"

Not desperately. It would be a nice top up, but we wouldn't be sweating without it.

I thought the £265k in the original post was a typo and he meant £25k, when put into context?

Yep, my mistake, that 6 sneaked in there unnoticed somehow! It's £25k pa from 2018 to 2022.

Have you obtained a new state pension statement?

Yes, I am entitled to a state pension as of reaching 66 years old (2025)


Thanks again all.