Starting an NHS pension aged 50+

JoeCrystal

lesterrad wrote: »

I am am 18 months into a 3 year NHS contract. I am single, with few assets, earn £47,000 and have been paying 9% of my monthly pay into the nhs pension scheme since I started. I have accumulated around £5k, so far and I have six months to decide if i want to continue with the scheme, before i loose the right to cancel and get a refund. I do not have any other pension and there is no guarantee that I will get another contract when this one finishes. There is a chance that I could continue to work in the NHS until I retire, but I am not sure that even if I continued making the same sort of contributions it would be worth staying with the pension as i started so late. As a contractor there is a greater chance that I may not be in continuous employment and have funds stuck without me having access to them. I am considering withdrawing it an investing in physical gold.

That is just insane. :eek: NHS pension scheme is one of the most best pension schemes in the country. You didn't mention how old you are but just to highlight how expensive it is to fund that in a DC pension scheme

Assuming your salary is fixed for three years and finishing by the end, you will expect a pension income of £2,611 at 68. (Assuming your SPA is 68)

An 18 years old person would have to contribute £126.65 per month (which increased by 2.5% every year) for 50 years (and if the stock market are performing well). You are only contributing £352.50 per month (before tax) for only three years.

The cost to you: £12,690 over three years You will expect the cost to be repaid in almost five years and pure profit for the rest of your life.

The cost to 18 years old starting with a goal of £2,611 index-linked annuity: £75,990 in real term over fifty years (Or £148,156 unadjusted)

And besides, you still get death in service, ill health retirement and other benefits as well. So the cost for you would be high if you get a refund and even more significant if you still work for the NHS after three years.

£2,611 per year is not a small amount! It is a very useful foundation for your retirement.

xylophone

And your NHS pension is index linked.

lesterrad

Thanks for explaining. I have heard so many horrible forecasts of global economic breakdown in the next few decades and that the first casualty will be Governments inability to fulfill their pension guarantees. I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

Thrugelmir

lesterrad wrote: »

I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

Whatever someone will pay you for it.

Thrugelmir

lesterrad wrote: »

I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

Whatever someone will pay you for it.

You won't receive any employer contributions if you opt out. In laymans terms that's free money. Though as a taxpayer myself I have no objections. As at least will contribute to a reduced national debt.

hyubh

lesterrad wrote: »

I have heard so many horrible forecasts of global economic breakdown in the next few decades and that the first casualty will be Governments inability to fulfill their pension guarantees.

'First casualty' - on what basis? Public sector pensions have been around for a very long time and so have already passed through several recessions.

nicknameless

It does smack of trolling.

However OP if you are not trolling then the fact we are thinking it should give you some evidence as to how far off the mark your thinking is.

I am in the NHS pension and there is no way I could accumulate the benefits from it otherwise.

Gold lol.

JoeCrystal

lesterrad wrote: »

Thanks for explaining. I have heard so many horrible forecasts of global economic breakdown in the next few decades and that the first casualty will be Governments inability to fulfill their pension guarantees. I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

Where are the forecasts? I certainly have not seen any horrible predictions. I much rather have a snowglobe that gives me a great guaranteed index-linked pension that costs me peanuts instead.

Aretnap

lesterrad wrote: »

Thanks for explaining. I have heard so many horrible forecasts of global economic breakdown in the next few decades and that the first casualty will be Governments inability to fulfill their pension guarantees. I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

I have no idea what forecasts you're talking about, but if they're claiming that public sector pensions will be the first casualty of this cataclysm then they're self-evidently nonsense. The first, second, third and fourth casualties of an economic crisis would be the same sort of things that were casualties of the last one - welfare payments, NHS budgets, public sector pay rises, police numbers, public libraries, road maintenance etc etc etc. Public sector pensions would be pretty much the last casualty - they have been around for more than a century and a half and have quite comfortably survived the Great Depression, the loss of the Empire, the oil shock, stagflation in the 70s, the Great Financial Crisis, two World Wars and one World Cup. If you're planning for the sort of cataclysm that sees the government defaulting on its pension liabilities then I'd suggest that tinned food and maybe a gun would be better investments than gold.

Your other objection seems to be that while the NHS pension effectively represents free money for you (as, unless you're unfortunate enough to die very unusually young, you will almost certainly take out substantially more than you pay in), it's not worth doing because it will only be a little bit of free money. That may be true, but a little bit if free money is still better than no free money.

On the other hand, speaking as a taxpayer I definitely think that you should opt out!

Brynsam

lesterrad wrote: »

I suppose the crystal ball question is: how much will £12k worth of gold be in 15 years time?

If you've not looked at any of the charts showing the price of gold over the last 20 years, do a bit of googling and think again about your assumption that it must increase in value, always, all the time...