Alternative to nhs pension?

Docjames

yes...Equities are a bit too risky ...

ermine

Docjames wrote: »

yes...Equities are a bit too risky ...

Noooo...!!!!!!. You are 41? You have 19 years to retire at 60. What did you think made up 60% of VGLS60? Equities

You are confusing volatility with risk. Don't do that. Sure, in a bad year equities can fall 50%. The way (among others) you manage that is as you are about to retire, perhaps derisk, either shunt out 20% of your holdings a year over the five years before retirement or shift the balance (swap some of your VGLS60 for VGLS20) over several years.

As a rough rule of thumb money you won't be calling on for five years or more should be in equities, because inflation kills other asset classes slowly and insidiously. If you need it in less than 5 years something else will do. Inflation is bad but five years of inflation isn't too bad.

You either need to pay for an IFA to explain this to you or learn it yourself. Try Monevator for a good UK angle on investing and why you use equity based assets for that.

Alternatively you could celebrate the rewards for your hard work in having an excellent pension and whatever you do don't give it up It's a better place to start from than where most people are.

bigadaj

Docjames wrote: »

yes...Equities are a bit too risky ...

But almost all 'normal' pensions, by which I mean defined contribution schemes that are largely the only ones available in the private sector, will be heavily invested in equities.

With risk comes reward, you need to assess your risk profile and timescale for investment, and from that a suitable allocation and funds should follow.

Docjames

sorry..when I mentioned equities, I mean't individual shares...do not want to touch them, but yes...funds like VLS60 are something to look into

peter3hg

MonkeyDr wrote: »

I'm not convinced that these days that many doctors will "almost certainly" hit the LTA.

The 2015 scheme is CARE, with pension accruing at 1/54 of annual earnings each year (might have phrased that poorly, but you know what I mean).

Some juniors now will, for sure.

But I am nearly 40, and like many of my contemporaries I have recently started working part-time because I have young children and I'd like to see them occasionally. I also have chosen a specialty which pretty much requires a PhD, so I am still a couple of years off being a consultant. I earn less than £35k pa at present.

I'm not complaining about it. But it given that even when I become a consultant my salary will be around £75k (planning go back to full-time in a couple of years), I don't think I'll hit the £50k pa pension expectation to hit the LTA. Especially as I doubt I'll be fit enough to keep working at this intensity after 60 ish.

(for reference, if consultant salaries had kept pace with inflation from when I started medicine, the consultant starting salary would be some £20k pa higher. And pension contributions were only half as much as they are now. You can see why a) the old pension scheme was bonkers, and b) medics around our age look at those retiring now with envy)

Like the OP I am looking at SIPPs and other options to bridge the gap.

You'd be amazed. I've done a quick calculation and assuming you stay on £35k until you are 44 at which point you become a full time consultant, you would have earned an annual pension of £54,817 at your full retirement age.
This obviously ignores the fact that you probably already have a reasonable amount of pension built up and assumes you never get CEA, on-call allowances etc.

infj

Ignore the trolls - it's only when they have to pay £600 per month for health insurance after Tories have destroyed NHS or are bankrupt because of a broken leg that they will appreciate what they had.

Do not give up the NHS Pension but you do need to consider what you actually want to do in the future. You basically need cash and investments to provide you with an income until you can take your NHS pension without the penalties being astronomical.
So eg. do you want to semi retire at 55 - as a doctor you are in a great position cos Trusts will fall over themselves to keep you working even if only for 1-2 sessions a week. You then just need enough money to cover the shortfall of your living expenses - NB not your income but what you actually need to live on.
A private pension has tax advantages but bear in mind that the government can mess with their rules too. So whacking the max into ISAs every year is the best both cash and shares.
The Ermine above refers you to Monevator - a great site - go there and read about index trackers and passive investing and then start one.
I have made an average 7% pa on mine over the past 20 years despite crashing stockmarkets.


Good luck.

stoozie1

infj (presumably this is your Myers-Briggs?), can I just clarify why you think the actuarial reduction wouldn't be worth paying? It's just it's on the cards for us to do this with OH's NHS pension, and so I wondered.

Not trying to derail, but it could be relevant to the OP too.

dunstonh

The Ermine above refers you to Monevator - a great site - go there and read about index trackers and passive investing and then start one.

That would be bad investing. Whether it is managed or passive, single sector investing is bad investing. Suggesting such a method to someone who has made poor investment decisions in the past is not a good idea.

A private pension has tax advantages but bear in mind that the government can mess with their rules too. So whacking the max into ISAs every year is the best both cash and shares.

What basis have you made such a direct recommendation? Why are you suggesting both cash ISA and S&S ISA?

I have made an average 7% pa on mine over the past 20 years despite crashing stockmarkets.

That is quite low for a 20 year period. This suggests you are not single sector passive investing as you are recommending the OP to do.

MonkeyDr

peter3hg wrote: »

You'd be amazed. I've done a quick calculation and assuming you stay on £35k until you are 44 at which point you become a full time consultant, you would have earned an annual pension of £54,817 at your full retirement age.
This obviously ignores the fact that you probably already have a reasonable amount of pension built up and assumes you never get CEA, on-call allowances etc.

Thank you, that is v interesting. I thought that I had done my numbers right (and my career hasn't been entirely linear so I am a little worse off than others my age / grade), but I will go back and look again. Any maybe try and get a quick LISA before I am too old instead of a further pension...

ermine

dunstonh wrote: »

That would be bad investing. Whether it is managed or passive, single sector investing is bad investing. Suggesting such a method to someone who has made poor investment decisions in the past is not a good idea.

Monevator's site makes the very same observation to my eyes, diversify is a frequent theme, both within and across asset classes. There's a case to be made that the investing learning curve may be tough for the OP, but I have to push back on the indication that Monevator would advocate single sector investing, it just ain't his style at all IMO