NHS Pension Equity Release

Mikewm8

I am a 57 year-old who is currently renting. I accrued substantial debts due to legal fees and need £30,000 to pay them off. I have been in the NHS Pension Scheme for many years and earn £45K per annum. I tried to release some equity from my Pension but am advised that I cannot unless I retire. Is there another way for me to get at my pension fund?

PensionTech

Not a good one, I'm afraid. Your only option would be to take early retirement from the fund and commute as much as possible for a lump sum, which would be very poor value and affect your finances for the whole of your retirement, and (I believe) affect the income you would be able to earn from the NHS thereafter (something called abatement). You can't even transfer it to a personal pension (which would almost certainly be a bad idea anyway) because transfers out of the NHS to defined contribution schemes are now prohibited.

Will your debtors offer you a payment plan? If not, are you able to raise the finance through unsecured loans?

xylophone

http://www.nhsbsa.nhs.uk/Documents/Pensions/Working_After_Retirement_Factsheet_(V2)_04.2012_.pdf

Is the above relevant to your case?

BobQ

xylophone wrote: »

http://www.nhsbsa.nhs.uk/Documents/Pensions/Working_After_Retirement_Factsheet_(V2)_04.2012_.pdf

Is the above relevant to your case?

The link does not work.


It would be a bad long term decision but......... could the OP opt out of the NHS pension and then rejoin after a short interval in order to build up a separate pension. Then take the pension to date (actuarially reduced of course). The OP would get the lump sum, but could just accept that their salary would be abated by the value of the pension in payment.

Not sure if NHS rules allow this, just a suggestion.

xylophone

The link does not work.

I am wondering whether the separation of the pdf at the end is causing the problem?

The OP could try typing "nhs working after retirement fact sheet" into Google.

Kynthia

BobQ wrote: »

The link does not work.


It would be a bad long term decision but......... could the OP opt out of the NHS pension and then rejoin after a short interval in order to build up a separate pension. Then take the pension to date (actuarially reduced of course). The OP would get the lump sum, but could just accept that their salary would be abated by the value of the pension in payment.

Not sure if NHS rules allow this, just a suggestion.

I don't think it's simple to rejoin the pension scheme while claiming a pension from the same scheme. I don't know the scheme rules for the NHS but it's not allowed elsewhere. They have to cap their earnings or get a job somewhere that uses a different pension scheme.

To be honest any way of using their pension leaves them worse off for their whole retirement and probably isn't the most cost effective solution at this age.

atush

I wold go to the Debt free board and ask for hlp there. There may be options such as payment plans etc that you have not taken into acct.

Plus ways to increase your income (such as taking on a lodger for instance).

Do you own a home? Could you remtg and take some equity out of your home?

Can you cut down your outgoings to free up some of that 45K to pay off your debt?

bigadaj

atush wrote: »

I wold go to the Debt free board and ask for hlp there. There may be options such as payment plans etc that you have not taken into acct.

Plus ways to increase your income (such as taking on a lodger for instance).

Do you own a home? Could you remtg and take some equity out of your home?

Can you cut down your outgoings to free up some of that 45K to pay off your debt?

The first line of the OP rules out half your options.

mgdavid

Kynthia wrote: »

I don't think it's simple to rejoin the pension scheme while claiming a pension from the same scheme. I don't know the scheme rules for the NHS but it's not allowed elsewhere. .......

it can be, it depends on the how the pension scheme(s) are structured. What looks like a change of rules can in fact mean it's a completely new scheme separate from a previous one. I took a DB pension from my employer whilst remaining employed by them and contributing into the current (DC) scheme.

Alice_Holt

Get debt advice - you could try Stepchange
https://www.stepchange.org/

ex-pat_scot

Sounds like debt management is the better option than pension cash release (even if that were possible).


if the OP does not have other significant assets, then using Citizens' Advice Bureau might be a good start.
Bankruptcy might also be an option, although it's not without its impact (there's no house involved).