Early retirement nhs

GunJack

I don't know the NHS scheme in detail, but you may not be able to take the two sections pensions at different times, it may be all or nothing, e.g. if you retire at 60 the 1995 section will pay unreduced, but the 2015 part may have actuarial reduction for the 7 or 8 years until scheme retirement age...

e.g. if, at 60, your 1995 part is worth £25k p.a. and your 2015 part is worth £15k p.a., you could find your pension is worth 25k+(15k-7 years actuarial reduction@ 5% p.a. so about a third), so £25k+£10k=£35k p.a. I tried to mention this in the earlier post.

Someone more au-fait with the NHS scheme could comment, hopefully?

Twoplus

You don't need to take both schemes together, however there is a big but. You can't continue paying into the 2015 scheme when you are taking your 1995 pension. My trust offer to pay into s nest pension for those who want to take their 1995 scheme but continue to work to meet their legal responsibility to provide a pension.
You can either take your 2015 scheme reduced for early payment or defer it until scheme retirement age.
Have you had a look at early reduction buy out, on the NHS pension site, it may be worth considering.

20yearnhsguy

Ok great thx both good to know I’m able to take them at different times - think I’m going to speak to my trust / nhs pension helpline and see what my options are at this point. Think it’s sensible planning now for options in 15-20 yrs time, I might post again with an update of my plan once I’ve learnt more

Pocket9s

What is your target retirement income?
You should take the 1995 pension at age 60, it won’t be enhanced by delaying taking it.
You have 16 years in the 1995 section which has an accrual rate of 1/80 which will give you 15k per year, as well as a 45k tax free lump sum in today’s money at age 60.
Start paying into a SIPP as soon as possible, try and at least pay in enough to push you out of the 40% tax bracket. Then need to judge whether to contribute the rest of your available monthly savings to a SIPP or an ISA

Age 60 you will then have your 1995 pension, can then draw heavily on your lump sum, SIPP and ISA over the next 7 years to supplement your income. Or work part time/step down to a less demanding role part time to supplement as well. I would plan to not be working as then you are not forced to. NB as earlier poster said once you take the 1995 pension you can’t build any more in the 2015 scheme

Age 67 you will then have your 15k 1995 pension, and your 19 years in the 2015 scheme - this has an accrual rate of 1/54 at present so will give you approx 26k in today’s money (with no lump sum). Plus the state pension approx 8k. So a total of almost 50k in today’s money, plus whatever is left in your SIPP and ISA.

The above is subject to change as they may change the rules in the next few years, but should give you a rough guide.

Keep your spending reasonable should be retiring in a very good position.

spaniel101

You can find all you need to know here;


https://www.nhsbsa.nhs.uk/member-hub


Very informative NHS Pensions website, they also have a 'knowledge base' for any questions you may have.


"Pay into a sipp for next 15 yrs or so
Retire at ?62 taking my sipp and 95 pension
Then at 67 take my nhs 2015 pension and state pension"


This is my plan as above, albeit I can draw my 1995 section @ 60, and continue to pay into 2015 scheme (if I continue working) as I had a break of 5 years (or >) between sections.


In addition, I have paid added contributions into 2015 plus ERRBO (early reduction buyout of 2 years max), therefore could draw 2015 scheme at 65 (as oppossed to 67) without reduction.


I also have a SIPP to bridge.

Jitter

I'm far from an expert on this but having recently been working out figures for my wife...

You have not got a pension pot as such, your pension will be calculated on your final pensionable pay e.g. the 1995 section is calculated on 1/80 x final pensionable pay x years of membership - so for example if leading up to retirement you end up on a higher salary your final pensionable pay will be more, or vice versa if for example ill health/caring for elderly relatives forced you to reduce your hours.

The best way to work towards early retirement is get promoted as high as you can in the NHS for a couple of years then take the NHS pension and a nice part time stress free job somewhere else!

20yearnhsguy

Thx so much pocket9x - that looks like a pretty good plan to me - I’m gonna look into this in more detail but it looks like a great plan.
I’ve gone from a total novice, not even knowing how pensions worked embarrassingly, to making a pretty good stab at a plan in just a month, thx to you guys on this site - really tremendously helpful.
Once I’ve arranged something I’ll post it back on here

20yearnhsguy

Spaniel101 - thx - and v reassuring that you’ve basically the same plan. I’ll look into the errbo too as that sounds like a good idea too

toothdoctor

With regards to paying into a sipp as well, just do your calculations so that you don't exceed the annual allowance limit of 40k(although you can carry your previous 3 years unused allowance forward). With the NHS pension the annual allowance is calculated against the growth of the pension rather that the actual superannuation payments you have made each months.

20yearnhsguy

One thing I’m still not sure about - can anyone help?
If i retire at 60ish, I will have 35 years continuous service in the nhs, and I won’t take my 2015 pension til I’m 67.
That means I won’t be contributing to it from 60-67.
when I finally claim my pension at 67, will I get penalised for not contributing to it from 60-67? Or will it be the same as if I kept working til 67?
Thx anyone out there