NHS Pension

Dazed_and_confused

Please help, I think I’m missing something?

In the example quoted the employee would pay £3,534 (net of tax relief) for one year.

In return they would receive £1,645 each year from the normal pension age for that scheme until their death.

yellow218

Dazed_and_confused wrote: »

In the example quoted the employee would pay £3,534 (net of tax relief) for one year.

In return they would receive £1,645 each year from the normal pension age for that scheme until their death.

Exactly. I still don’t understand. £1,645 per year. Surely that’s not the pension? It’s not enough to live off of, even if you are retired.

Dazed_and_confused

Well in reality most people will do more than one years service so would build up a much larger pension.

A bit simplistic but 10 years service would mean a pension of £16,450.

nigelbb

Simplistically the NHS pension is accrued at 1/54 each year i.e. if your salary is £54K the pension earned each year is £1K/year. After ten years your pension is £10K/year.

The pension is effectively deferred salary paid after retirement so if you live 27 years after retirement that's another 50% on top of the original salary paid & that's a very simplistic view because it's all index linked so in money terms it's worth much more than 50%.