Best Pension

thebullsback

My Wife Age 63 has retired and returned to work 4 days a week in her origional position within the NHS .
As the NHS has to provide her a pension they have offerd NEST pension.She is not allowed to rejoin a NHS pension.
Her salarey is £18000 a year and she intends retiring in full when she is 65.
She has the option to join or not join NEST for her remaining two year .What would be the advantage and dissadvantage of joining or not joining?
Many thanks for reading.

MallyGirl

Presumably if she contributes then the employer must too. Free money!
Then there is tax relief

xylophone

Presumably she is earning nearly as much as before she "retired" and has her pension on top.

She might like to consider contributing as much as possible from her salary to the NEST pension - NEST will accept additional employee contributions.

She would be entitled to a 25% tax free lump sum from the NEST pension when she chose to take it.

thebullsback

so if my wife contributed the max she is allowed then in two years she would claim all she has paid in pluse the NHS contribution as 25% tax free the rest would be taxable

AnotherJoe

thebullsback wrote: »

so if my wife contributed the max she is allowed then in two years she would claim all she has paid in plus the NHS contribution as 25% tax free the rest would be taxable

Sort of. Except she wouldnt "claim it" it would just be there in her pension. She can then remove 25% tax free and spend the rest down in a way that suits her and probably minimises tax unless she wishes to pay more than she needs to



Just in case you were in doubt, the way the maths works is that free money with some tax paid on it is better than no free money and pay no tax on it.

Deneb

My wife is in the same position. She contributes to the NEST pension. As others have said, why wouldn't she? Anything is better than nothing.


She also contributes an amount equivalent to what her contributions would have been had she been allowed to continue in the NHS scheme, into a SIPP. Our intention is that when she retires next year the SIPP will bridge the gap by allowing her to draw down an equivalent of her SP until she reaches SPA.

green_man

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