NHS Pension Planning for Nurses

Blueboo86

Hello All,

Firstly, thank you for the wealth of information i have learnt on these forums, secondly, please can anyone help explain my options re. Early retirement from NHS pension for myself (not a high flying Dr destined to be earning a high salary!).

I am a nurse manager currently earning £33,000pa and over the next 7 years i expect this to rise to around £45,000.

I am 32 years old and am not married nor do I have any dependents. I will be mortgage free by my 40th birthday.

My aim is to be able to retire 10 years before my state pension age (currently 68). What I am trying to decide is how to go about bridging the gap before being able to take both my NHS and state pension at 68.

I am currently considering ERRBO to enable me to take my full NHS Pension 3 years early, Will i still be eligible for this if I stop paying into my pension at 58?

I have recently began drip feeding a very small amount into a S&S ISA which is high risk. I intend to use this for my retirement but it is also an emergency fund if anything happens which my cash savings won't cover. I will increase contributions as my salary rises.

The rest of my "spare" cash i intend to drip feed into some sort of pension fund, which i will be able to access from age 55ish. I am considering NHS Prudential/Standard Life AVCs or Stakeholder pension (not really sure what the difference is, Will read up though) or i am toying with the idea of a SIPP, I don't have the time nor the brain power to do this fully self invested though and feel that due to this and the fact i will be drip feeding may lead to high charges which i obviously would like to avoid.

Any investments i make I am happy to be high risk (for the time being) and any guidance around early retirement from the (2015) NHS pension scheme would be gratefully received.

Kindest Regards and Thanks in Advance,

Blueboo86

crv1963

ERRBO gets you the pension at 65. So if you stop at 58 then you will be 7 years short of full pension- but that will still be a great deal. SS ISA will help fund the gap 58-65, a SIPP probably in a multi- asset fund- there are lots but Vanguard seems popular, through a platform like HL?

I'd do a bit of reading on here, take time to understand it all and speak to the pensions officer- they wont advise but will explain how you can maximise contributions through payroll.

Are you over paying the mortgage? If so could you plan it so you can divert some of this money into a pension and tie the mortgage finishing with the start of taking pension at 58? Time in the market and all that.

Microbe65

I was a Microbiologist in the NHS and had the same dilemma. I opted for a HL SIPP as this was simple, cost effective and offered flexibility. So I will have a SIPP drawdown from aged 55 to 60. NHS (1995) pension from 60 to 67 and NHS (2015) & state pension from 67. My only regret is that I didn't set up my SIPP earlier.


As you will be contributing to both NHS and a second pension, be aware of the earnings limits and the annual allowance (£40k) as pay/increment increases in your NHS salary can have a significant effect.

https://www.nhsbsa.nhs.uk/member-hub/annual-allowance

louloubelle79

Hi
Im also a nurse and wanting to retire earlier than 68!! I have started to pay Additional Payments you can pay up to £6500 a year extra however this wont allow you to retire earlier just give you extra pension.


So I have started the NHS AVC with Prudential, I am only paying in £50 a month at present but hope to contribute more. I believe you can retire earlier taking this until you the full NHS pension kicks in.


https://www.pru.co.uk/rz/nhs/existing-customers/


More info here


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

Blueboo86

Thanks for this, I definitely need to read more about charges relating to SIPPs and will probably go for HL as per so much advice on here.
I have already significantly reduced my mortgage over payments from £250 pcm to £50 pcm but even without these over payments i will have paid it off by the time I'm 40. the house is an investment in itself though as I bought at the right time and is already worth much more than I paid. I also intend to move up the property ladder in 10 - 12 years and will only need a small mortgage to do this.
I now have the number for my Trusts Pension officer and will be contacting them soon.

Blueboo86

Also if anyone is in the RCN or Unison you can get a free one time telephone consultation with an independent financial advisor, I've got mine tomorrow and will update you as to how i plan to proceed.

I can't post links but just google your Union and "pension advice" and it's pretty easy to find.

Thanks again for all your responses, I will continue to follow for any more words of wisdom!

Microbe65

Also if anyone is in the RCN or Unison you can get a free one time telephone consultation with an independent financial advisor, I've got mine tomorrow and will update you as to how i plan to proceed.

I hope that the advisors supplied by RCN or Unison are better than those provided by my own union - Unite. At a recent seminar on retirement it was stated (by an IFA) that NHS employees could also utilise pension freedoms. As the NHS pension scheme is an unfunded DB scheme, this is no longer allowed.

Blueboo86

Oh dear, I detest when one person stands infront of a group of people to educate them and talk utter nonsense, some will have gone away believing what he said. RCN's is arranged through Lighthouse. I'm reserving judgement until I have spoken to him but am trying to learn as much as I can before then so I can ultimately make up my own mind. I guess I just want reassurances I am on the right track as any mistakes now may have huge impacts on my future.

Blueboo86

Update:
I spoke to the IFA this evening, I discussed my current situation, what I am already doing and that my priority was to bridge the 10 year gap between when I would like to retire and my SPA. He advised me to drip feed ALL of the money I had sidelined for setting myself up for the future into the Vanguard LifeStrategy 80% equity fund I already have. I questioned him about this as I wanted a pension to get the tax relief that would come with it, he explained that yes, I would get tax relief going into a pension but would have to pay tax on 75% of what I took out. Now I already knew this but didn't think to balance that out with the tax free drawdown I will get from my ISA (I won't need to draw down huge amounts as I live a fairly frugal life).
He also advised me to seek further advice and explore different options once my ISA reaches around £30-40K. I estimate this to be in around 6-8 years, depending on my returns. This is around the time my contributions will increase significantly so ties in well.
Things will have changed by then so I'm not even contemplating what to do once I've built my funds up. I would however love to know what anyone thinks about putting everything into my S&S ISA.
I did discuss many other things with him that I won't go into now, but please, any thoughts would be gratefully received.
Kind Regards
Blueboo86

Techno

Not anywhere near an expert here but, you may not be paying tax on what you draw down from your sipp. I am in a similar position to you although I transferred my NHSpension to the Local government pension and am now paying into the teachers pension service (yes I know, I still don't know what I want to be when I grow up).

My plan is to not draw the lump sum in one go' but to take it divided over the years until I can draw my other pensions so by then (and roughly) £12500 up to personal allowance limit and £4100 tax free lump sum which will give me £16600 before I pay any tax. I will empty my sipp over this time then get a similar amount from my other pensions when they kick in.

So personally I would make use of the free money the government contribute to your pension savings if you will be in a similar boat.

Sipps and isas are just wrappers, what you put in them can be almost the same so you could save into the vanguard fund in a sipp too.

I also use HL but, there are other platforms out there and HL are not the cheapest so investigate that too.

kidmugsy

A LISA would pay out, tax-free, at 60. It might be a great help with filling part of the gap. You can contribute to it from any age below 40 up to age 50. Every £4k added by you gets an extra £1k added by the ever-bountiful taxpayer.

If you think the stock markets are due a crash you could start off with a Cash LISA and transfer to an S&S LISA later on.