32 year till retirement pay our mortgage off Vs NHS pension

kara_p_uk

so in theory we could retire sooner and get the NHS pension early?

liviboy wrote: »

You are more than able to retire BEFORE state pension age. It is simply that the pension will be reduced by a %age for each year you take it early as you will be taking it for longer (hopefully anyway).

You are under no obligation to work until 68, 69, 70, etc. At present even the 2015 NHS scheme can be taken at 55 though government rules may change to increase the 55 age to state pension age minus X number of years...but that would apply to equally to all types of pension.

woolly_wombat

kara_p_uk wrote: »

If we had paid off our mortgage our property would be owned outright which we would be able to sell once we reach state retirement age as we have an alternative place to live at retirement age. The property value is greater than the potential pension investment.

Are you saying that you own a second property?

Don't forget that house prices have been inflated by emergency low interest rates that aren't going to last forever, and when interest rates start to rise property prices are likely to go the other way.

It's never a good idea to put all your eggs in one basket.

Don't give up your valuable NHS pensions!

kara_p_uk

ahh thanks yes i will do that. I've done the budget calculator on here and we are about 20 a month in the green give or take.

stoozie1 wrote: »

a Statement of Affairs on the sub-forum of MSE called Debt-Free Wannabe. It's a way of getting fresh eyes on your finances to see if any easy savings can be made.

stoozie1

yes, it's currently a 5% reduction for the years between 60 and 65 and 3% from 66 upwards. So a 31% reduction to retire at your 1995 scheme age with it's benefits.

kara_p_uk

we bought a flat abroad cheap about 36k as it was a bank repo in 2011, it is currently on a spanish mortgage but valued at 70k.

woolly_wombat wrote: »

Are you saying that you own a second property?

Don't forget that house prices have been inflated by emergency low interest rates that aren't going to last forever, and when interest rates start to rise property prices are likely to go the other way.

It's never a good idea to put all your eggs in one basket.

Don't give up your valuable NHS pensions!

stoozie1

* or 37% depending on how old you both are and when SRA changes again.

kara_p_uk

i've had so many relatives who have never lived to actually claim their pension, it just feels like so much money to pay out when I want to spend money now on letting my children enjoy things. We already shop at lidls by most our clothes from charity shops i move our debt onto 0% cards, i remortgage when our rate is no longer good. I juggle everything to within pounds to be able to afford to go on holidays where we can and to go on day trips I dont' want to pay into a pension but die before I enjoy it

hyubh

Our employer contributes an additional 14.5% (I think)

It's a DB scheme, so the details of the employer rate don't actually matter (the employer - which in your case means the taxpayer of the future - on the hook whatever). That said, compared to how a private sector DB scheme would value its liabilities, the way the government values liabilities in the NHS and other unfunded public sector schemes strongly understates the costs anyway.

over 32 years that total pension contributions from us and them roughly would £419000 between now and when we retire, this sounds monumentally higher than the return would be?

Huh...? Compared to buying a joint life annuity of the same value privately, it's incredibly cheap.

How many years post retirement at 68 would we need to survive to actually get the level of return back?

The figures in your head are all wrong.

I have asked for our predicted pension rates as this will give us an idea of the potential monthly amount we will have to live off at 68

Do you understand how the scheme works? (Not a rhetorical question.) Each year in it, 1/54th of your pensionable pay for the year goes into your 'account'. At the end of the year, the pension already earned is increased by CPI+1.5% (if you left before retiring, then the increase is simply CPI). On state pension age, you become due a pension of the revalued total to date. When one of you dies after that, the other then gets 1/3rd of the others pension until the other dies too. Beyond this, there are also ill health and life cover benefits.

but I don't want to work till I'm 68

This answers a different question to whether to opt out well before then.

my dad died at 57, my husbands dad at 54, my grandma at 54...

Sad to hear, but not the norm for people that age then or now.

Our biggest debt is our mortgage and so it is that debt that ties us to having to work for so long.

Using the fact of having a mortgage as a reason to opt out of the NHS pension scheme is just ridiculous.

I fully understand the need to plan for retirement and if i was in the original NHS pension scheme where I could retire at 55 I would in no way consider leaving it but this current scheme is linked to state retirement age so if that increases again and again over the next 32 years I've got to work longer and longer.

It's the normal pension age in the scheme, not when you have to take the pension.

Triumph13

Unless that Spanish property is being rented out in a way that completely covers all the costs of ownership, including mortgage payments, taxes and maintenance, then I would respectfully suggest that that is the indulgence you can't fit into your budget, not the pension.

stoozie1

kara_p_uk wrote: »

i've had so many relatives who have never lived to actually claim their pension, it just feels like so much money to pay out when I want to spend money now on letting my children enjoy things. We already shop at lidls by most our clothes from charity shops i move our debt onto 0% cards, i remortgage when our rate is no longer good. I juggle everything to within pounds to be able to afford to go on holidays where we can and to go on day trips I dont' want to pay into a pension but die before I enjoy it

This is very understandable, and again, sorry things are so tight.

However (you knew there was a but coming!)

In the event one of you or OH did go early, the NHS pension does give an amazing spouse and children's pensions, (children's up to age 23 if in education). One person not getting to retirement age is a horrible thought, but with the NHS pension you would be well provisioned. How many years of service will OH have done in the 15 scheme and how many years does he have in 95/08?