NHS Pensions: What is what?

dutchcloggie

Hello,

I am looking to increase my NHS pension but I don't understand any of the terms used so I can't really make a choice as to what would be best for me.
I am 42 and started working in the NHS in September 2015. I have had no pension from previous jobs so I am starting from zero. My partner is a lot younger than I am and is currently saving around £450 per month for her pension in the hope she can retire at the same time when I turn 67 o we can hopefully do some nice things together.
I thought I could just ask payroll to take an extra £200 per month out of my salary and add it to my pension. How silly of me. I got a really complicated response about the following things:
Additional Pension
Early Retirement Reduction Buy Out
Money Purchase Additional Value Pension
Bigger Lump Sum Purchase

I don't understand which of these options would be best or even what the actual difference is. I am not asking for tax reasons as that is way beyond my tiny brain. I just want the most money when I retire and I want to pay an extra £200 per month and just increase that every time my salary goes up (my wife is clever and puts 50% of every pay rise straight into her pension plan). I think I prefer a larger monthly pay out to a lump sum payout.

I'm sorry if this sounds stupid but I am from Holland so I don't understand the British tax system very well....

can anyone help me with this please?

Thanks.

Dazed_and_confused

You may be able to quickly discount two options,

Additional Pension - one to consider

Early Retirement Reduction Buy Out - not of interest if you're happy to work to normal pension age

Money Purchase Additional Value Pension - one to consider

Bigger Lump Sum Purchase - based on your original post this can be ignored

justme111

A bit off topic - I believe there is niche on the market- ISAS with knowledge of occupational schemes and desire to offer this advice.

xylophone

Hello,

I am looking to increase my NHS pension

Have you seen this?

https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension

dutchcloggie

Hi,
Yes I have seen that page, looked at all the options and did not understand them.


Ideally what I would like is to pay money every month depending on how much money I have left. So like a savings account. But I seem to think pensions don't work that way?
It seems that the only thing I can do with the NHS pension is to say: I want to buy another £20,000 (for example) that I will get once I retire and I am buying that by paying £x per month, until I have reached £20,000. Is that right?

atush

You can have an AVC that might work that way, or you c an get a personal pension that works that way.

The main DB NHS pension cant work that way.

dutchcloggie

I think I understand. I also seem to think that whatever kind of NHS pension I choose, it is always better than what is available on the open market? Is this right?

atush

Not necessarily the AVC option. Depends on the investments offered, and the charges.

justme111

Sorry I am not very familiar with present NHS additional pension options. You may have to go on their website and crunch some numbers. See what you have to pay to get what and compare it with what you could have had in private sector. Their head office replies to emails with questions as well. Normally NHS pension it is superior as your employer (trust/area team or whatever they called now) pays in more than you do. I do not think it applies to buying additional pension hence this crucial benefit may be lost.

dutchcloggie

Aha, I think I'm beginning to understand. I can buy an AVC from any pension provider, it does not have the be the one the NHS suggests for me.

So it sounds like that is the most flexible option for me.
I shall have a nosey around that option.

Silvertabby

Aha, I think I'm beginning to understand. I can buy an AVC from any pension provider, it does not have the be the one the NHS suggests for me.

So it sounds like that is the most flexible option for me.
I shall have a nosey around that option.

It depends on what you want to do. The in-house NHS MPAVC could give you the option of buying more index-linked pension in the NHS. That won't be possible with a separate free-standing AVC.