About to ditch 'Additional' NHS Pension in favour of SIPP

spaniel101

:shocked: WOWZA! Well...I'm sure I wont be the only one over the next month to post this update perhaps.


I have received a letter today from NHS Pensions. Having purchased a £6K Additional Pension contract only 12 months ago via installments for 14 years....they are increasing the monthly contributions from 1st April by....13.9% !!! (I smell a RAT!)


Mmmh, by chance having already made up my mind to opt out of this contract anyway in April (in favour of my SIPP contributions instead), this has definately confirmed I have made the right decision!

Await the mass Additional Pension Installments exodus....

hugheskevi

Having purchased a £6K Additional Pension contract only 12 months ago via installments for 14 years....they are increasing the monthly contributions from 1st April by....13.9% !!! (I smell a RAT!)

Not so much a rat as a discount rate change. More about the change at this link.

The discount rate, which is essentially the assumed annual return, changed from CPI+2.8% to CPI+2.4% from April 2019. The discount rate is based on expected future GDP growth, and Brexit changed the Office of Budgetary Responsibility's views of future GDP growth.

Given the lower assumed growth rate, to fund any given liability, eg, £6K of Additional Pension, a higher contribution rate is required.

FIRSTTIMER

That is exactly what has happened with my instalments, I now have had a significant increase in the cost of flexbilitiies with no reason for this......