Transfering out of NHS pension

Legacy_user

Hello,
I'm thinking of transfering my pension out of the NHS to a money farm one. I have been advised that I would be giving up "benefits" but I'm really confused as to what these are and how I would be worse off.
I no longer work for the NHS and have been paying into the pension for 5 years. If I transfer X amount out of it into another one I'm confused how I'll be worse off. Any advice would be appreciated.

Thanks

HappyHarry

michael0fowler wrote: »

Hello,
I'm thinking of transfering my pension out of the NHS to a money farm one. I have been advised that I would be giving up "benefits" but I'm really confused as to what these are and how I would be worse off.
I no longer work for the NHS and have been paying into the pension for 5 years. If I transfer X amount out of it into another one I'm confused how I'll be worse off. Any advice would be appreciated.

Thanks

The NHS pension is an unfunded Defined Benefit scheme. If you have been paying for more than 2 years then you can not transfer it to a Defined Contribution pension such as money farm.

dunstonh

I'm thinking of transfering my pension out of the NHS to a money farm one.

1 - Moneyfarm cant take it
2 - NHS pensions cannot be transferred to money purchase pensions.

but I'm really confused as to what these are and how I would be worse off.

Its irrelevant. You cant do it.

The NHS pension pays a guaranteed pension in retirement which increases annually. Its one of the best pensions around. Why would you want to transfer it to an expensive toy town pension like money farm?

Marcon

michael0fowler wrote: »

Hello,
I'm thinking of transfering my pension out of the NHS to a money farm one. I have been advised that I would be giving up "benefits" but I'm really confused as to what these are and how I would be worse off.
I no longer work for the NHS and have been paying into the pension for 5 years. If I transfer X amount out of it into another one I'm confused how I'll be worse off. Any advice would be appreciated.

You say you have 'been advised' - one can only wonder by whom, since transferring out of the NHS scheme to a 'money farm' one isn't permitted.

zagubov

Marcon wrote: »

You say you have 'been advised' - one can only wonder by whom, since transferring out of the NHS scheme to a 'money farm' one isn't permitted.

To be fair, the advice was implying that it would be a bad move and s/he should be wary of it. I'd class that as helpful general advice, even if the adviser wasn't aware that it wouldn't be allowable.

System

I wanted to transfer out as I don't like the idea of having multiple pensions in different places and not knowing what they are doing. I still only have an estimate of my pension after contacting them. I feel better control or at least information about how your pension is doing is only a good thing as it allows me to plan for my future accordingly. Money farm would allow me to do this which is why I was interested.


Marcon as zagubov has said, he is correct the advice I received was that it was a bad idea, not that I could/ couldn't.

Thanks

hyubh

michael0fowler wrote: »

I wanted to transfer out as I don't like the idea of having multiple pensions in different places

That would be an extremely poor reason for giving up an excellent DB pension.

and not knowing what they are doing.

'Knowing how it is doing' is a concept that only applies in a weak sense for a final salary or career average pension like your NHS one - there are no investments to check on, the future regular income you are building up is rather directly related to your salary. If you are unhappy about how fast it is building up, then the most direct solution is to work for and win a promotion or two, simple as that.

I still only have an estimate of my pension after contacting them.

You should be getting annual benefit statements showing your pension (i.e. regular income), as at your 'normal pension age' in the scheme, earned to date. This will be an 'estimate' only in the sense that the source data (employment dates, hour history, and pay details) may not have been properly checked by the scheme administrator - if they are correct, then the figure quoted should be the actual pension earned to date.

In contrast, any 'estimate' of future income from a DC/money purchase pension will be an 'estimate' in a much stronger sense, because the pension isn't an actual right to an income, but a set of investments, out of which you might buy an income when retiring.

AnotherJoe

michael0fowler wrote: »

I wanted to transfer out as I don't like the idea of having multiple pensions in different places and not knowing what they are doing. I still only have an estimate of my pension after contacting them. I feel better control or at least information about how your pension is doing is only a good thing as it allows me to plan for my future accordingly. Money farm would allow me to do this which is why I was interested.


Marcon as zagubov has said, he is correct the advice I received was that it was a bad idea, not that I could/ couldn't.

Thanks

If you had a "money farm" or any other DC type of pension they could only give you an even hazier guess (and it would be a guess) as to what your pension would be in the future. Look at what's happened to shares over the past few weeks. How can anyone predict both what that sum will be and what the pension from that will be in the future? The only unknown factor with the NHS pension is inflation.

Luckily for you you have no choice but to stick with your very generous NHS pension rather than destroy its value, and can use that as an "underpin" for whatever other pensions you have.

dunstonh

I dont understand where this advice is coming from. No adviser is going to recommend Money Farm. It's an expensive and low quality robo provider. Plus, no adviser is going to recommend you transfer out of the NHS pension as you cannot do that.

I suspect there is no advice being given at all. Its either a sales rep at moneyfarm or man-down-the-pub style comments.

I wanted to transfer out as I don't like the idea of having multiple pensions in different places and not knowing what they are doing.

You dont need to know what the NHS pension is doing as it is not that sort of pension.

I still only have an estimate of my pension after contacting them.

An NHS pension estimate is far more accurate than a money purchase pension projection.

I feel better control or at least information about how your pension is doing is only a good thing as it allows me to plan for my future accordingly. Money farm would allow me to do this which is why I was interested.

Money farm (or any DC pension) does not give you greater certainty over a DB pension like the NHS.

p00hsticks

hyubh wrote: »

You should be getting annual benefit statements showing your pension (i.e. regular income), as at your 'normal pension age' in the scheme, earned to date.
I/QUOTE]


Only if you are an active member of the DB scheme - it sounds from their second post as if the OP may not work in the NHS any longer.

hyubh

p00hsticks wrote: »

hyubh wrote: »

You should be getting annual benefit statements showing your pension (i.e. regular income), as at your 'normal pension age' in the scheme, earned to date.
I/QUOTE]


Only if you are an active member of the DB scheme - it sounds from their second post as if the OP may not work in the NHS any longer.

Doh, in the first post too. In which case, things are even simpler, the current pension is the figure in his deferred benefit statement increased by CPI each year since.