Pension advise for NHS worker, SIPP or ERRBO

justme111

So each year from 2015 onwards you would accrue about £1200 ( 65000÷54). 1200×15 ( from 45 to 60 ) = £18000. Plus 9 k you already got in 2008 scheme. Plus whatever state pension you will get. Looks more than enough. Keeping in mind you will have some state pension as well ( find out what it will be) you would have more than you need 68+. If you were to take the pension actuarial reduced early (at 60) it probably would be reduced by a third (18 k instead of 27). If with sp added it gets you to your number then your shortfall is (24-18)×8. Which is 48 k. Keeping in mind there would be some growth during those years it may be even less. So it looks like you may be on track for retiring at 60 and whatever other investments you do (ERRBO - stoozie, I do not remember what was said in your thread - was it worthwhile- ISA, personal pension or SIPP )are going to either move retirement date closer or make it possible to work less keeping the date.
Many contributors on here would say not to taking the pension reduced early as it results in a loss overall but if one has enough anyway I do not see why not to accept that loss in exchange for less work/less frugality/ earlier retirement.

rockingdane

The nhs pension taken 5 years early will lead to a reduction of 24 %.
Dane

stoozie1

rockingdane wrote: »

The nhs pension taken 5 years early will lead to a reduction of 24 %.
Dane

it's 3% for any year older than 65, and 5% for the years from 60-65 I thought.

So if we assume a SRA of 67 (but OP is assuming SRA will be younger than I am, as I'm reading Cridland plus a tad of pessimism!) I make it 19% reduction?

edit: I just googled and the live 2015 scheme data supports your figures Rocking Dane. Apologies.

stoozie1

victordent wrote: »

All of it is pensionable. Yes you are correct..some in the 2008 and then 2015. I am quite far from the LTA as I started late.
As far as sipp goes..did she need an IFA...how do decide on funds or shares?
Victor.

He did not appoint an IFA, we decided to both open SIPPs and are currently fully invested in Vanguard lifestrategy 100% equity.

With regard to funds or shares, my understanding is that funds are much safer because they are already diversified, whereas shares in an individual company carry more risk.

With a modest lifestyle planned for retirement, are you sure your NHS pension will be too low?

victordent

Hi,
I am unsure of the future of the nhs, so thinking of opt

victordent

I am unsure of the future of the nhs. Hence am looking for other options. So sipp or a private pension seems to be the way forward. I do not have much knowledge of funds though.
Victor

saucer

I have to say that making decisions about whether to put pension contributions in a private pension vs the NHS scheme on the basis of being 'unsure of the future of the nhs' seems a bit of a random and wooly basis to make what could be an important decision.

You are very unlikely to find a rival to the security and predictability of a (government backed) NHS pension, unless we really are all on our way to hell in a hand-cart before you retire (which seems less unlikely than it did!).

The only major disadvantage in comparison to a SIPP, as I see it, and why I have a SIPP as well as an NHS pension, is that it may not be as good if you want to access money before your normal retirement age.

AnotherJoe

As a high rate taxpayer, IMO its close to criminal not to be investing in a personal pension (most likely a SIPP) as you are throwing away free money the government will give you. In basics they will give you 40% on the way in and take 15% on the way out. A free 25% on whatever you put in.

An ISA doesn't even come close. Nothing in nothing out. Difference to SIPP, 25%

That SIPP money can be used to fund the gap between you retiring and taking your NHS pension at scheme age, avoiding the drop in pension you'd otherwise have (forever) for taking it early.

A SIPP also gives you more independence, whatever they do to the NHS pension, you have a second option.

You do not need an IFA, read Monevator, read here, pick some low cost index funds (or even just one) and you are done.

EDIT: All this subject to comparison with employers pension as per justme's post.

justme111

I have done back of packet calculation - even reduced NHS pension would offer about twice as good return as personal pension/SIPP assuming 5%return.

AnotherJoe

justme111 wrote: »

I have done back of packet calculation - even reduced NHS pension would offer about twice as good return as personal pension/SIPP assuming 5%return.

Nice. Obvious answer for OP then.