nhs pension advice needed!

lenny

Hi everyone
I'm hoping to improve my retirement fund, and have recieved some figures about purchasing additional years on my nhs pension
At present , if i retire at 65, i will get £10849pa, and a lump sum of £32549

If i buy 1 years additional service, costing £31.63 p.m.(24.67 after tax relief)this will give me an additional £321p.a. and a n additional lump sum of £962

the maximum I could buy is 6 years 276 days , costing £213.74p.m.(£166.72 ) giving me an additional £2167p.a., and an additional lump sum of £6499

Does this seem to represent good value or should i look at other ways of saving for retirement? I am 51, married and have quite high outgoings(Daughter at college etc!)
Apologies if this has been touched on in other threads
all the best steve

Andy_L

is the £31.63pm fixed or a %age of salary?

Are you a basic or higher rate taxpayer (i could work it out from the numbers you've given but I'm a lazy git at heart :-) )

The pension income will be taxed since the state & NHS pension already use up (more than) your allowances. The alternative is to invest in a (stocks & shares) ISA which provides a tax free income but doesn't receive tax releif on the way in.

Doe you spouse have a pension off their own? If not it my be tax efficient to use your money to buy them a pension.

Have a look at this thread for the isa v pension debate
http://forums.moneysavingexpert.com/showthread.html?t=375217

lenny

Thanks andy
The 31.61 pm is a percentage, and I am a basic rate tax payer. My wife works full time and has a pension- thanks for the link btw -It seems that a lot of people are in a similar dilemma !
all the best steve