NHS pension -opt out?

missmental123

I have paid into NHS pension since 1985. I have MHO status so after 20 years service, the years are doubled. So in effect I think I have the equivalent of 44 years service.I have been told that after 30 years my pension contributions don't count to my final figure. I'm considering opting out for 2 years and use the £340 a month to carry out essential refurbishment of our house.
I have made an appointment with our pensions officer to discuss it but just wanting others opinions or advice.
Am I crazy if I opt out ? My husband is also in the same scheme but he is anti me considering this!
My aim is to retire in 36 months time, age 55.
Thank you.

HappyHarry

Providing you are within the criteria, then yes, it looks like you have 44 years of membership.

If you had less than 40 years then you it wouldn't make much sense to opt-out.

However, the benefits of continuing contributions at this stage are limited, unless you are expecting some pay rises between now and retirement. You would lose the death-in-service benefits by opting out.

Given that you have the maximum years possible, you wouldn't be crazy to opt-out.

Have a chat with your pensions officer, and read more by clicking on "Mental Health Officers" under the following link:


https://contactcentreservices.nhsbsa.nhs.uk/selfnhsuktest/template-group.do?name=Membership+%2F+Service&id=5072

missmental123

Thank you Happy Harry, We do have other life insurance cover too just in case I pop my cloggs. I will chat it over with the pensions people. It's just very scary thinking of opting out but I could really do with the cash currently.

mark5

My only comment is that the 340 might include tax relief so if you opt out 272 might be what you actually see in your take home pay.

BobQ

Have you explored whether you can opt out of the standard NHS pension and then join an NHS Defined Contribution Scheme. Not sure if such a scheme exists - I think there is one in the Civil Service scheme - but if it does you may still be able to get some employer contributions?

atush

I would consider (esp as you want to retire early) that you divert the 340 into a DC pension (avc, PP or Sipp). use this pot to retire on initially for one year or more to maximize your DB pension.

Make your house refurbishments out of savings (surely between the 2 of you you have some) or take out a small mtg/loan against the value of your home.

Andy_L

If you stay in are you not accumulating benefits under the new 2015 scheme which doesn't have the maximum number of years service that can be counted

missmental123

Hi,

Thanks for your replies. It is all so complicated! I will see what the pensions officer has to say next week. DH is keen for me to stay in the scheme in case I pop my cloggs in service ! But we do have other life insurance to cover us.

BobQ

missmental123 wrote: »

Hi,

Thanks for your replies. It is all so complicated! I will see what the pensions officer has to say next week. DH is keen for me to stay in the scheme in case I pop my cloggs in service ! But we do have other life insurance to cover us.

If so ask how much term insurance is for whatever multiple of salary that the pension provides.

Thrugelmir

Wouldn't do anything hasty.

A quick browse suggests that there is a scheme limit of 45 years.

Scheme contributions have to be paid until the age of 60 to retain the full benefits.

There's a restriction of 40 years service up to the age of 55.

BobQ

https://www.nhsbsa.nhs.uk/sites/default/files/2017-03/Maximum%20membership%20and%20age%20restrictions%20Ext%20Employer%20Guide%20V3%201%2005%202013.pdf

You may find this helpful.

One of the potential benefits of opting out is (as I read this) that you are treated as a deferred member. So your pension on opt out increases by inflation not pay. But this all depends on how you see pay rising relative to inflation and whether your benefits are partly related to final salary. What it means though is that if you opted out you pension would rise with inflation just as it would if you had resigned.