Early retirement nhs

Silvertabby

20yearnhsguy wrote: »

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

It will be your benefits accrued up to the day you stopped working, plus annual cost of living increases. Of course it won't be what you would have accrued if you had continued to work/pay into the scheme until 67, because you/your employer would have ceased contributions at 60. Not getting something you haven't paid for isn't a penalty !

kangoora

20yearnhsguy wrote: »

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

To use an example (note that I don't know what the correct acumulation rate is for NHS pensions)

if it is 60ths scheme you will get 35 years / 60 x annual salary x annual rpi/cp increases over 7 years ( a few percent) if you retire at 60 - you've only paid in for 35 years so you get 35 years worth out when you start to draw it.

If you retire at 67 you would get 42/60 x annual salary (extra 7 years of payments). In this instance you get 42 years worth of salary in the calculation.

If you are earning £75k at 46 and have been contributing into the NHS at anything like that salary over the last 20 years I would be looking seriously at how close you will be to breaching the lifetime allowance (especially if you believe you could still be in for more pay rises). There's a reason lots of GPs/consultants retire early.

nigelbb

20yearnhsguy wrote: »

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

Silvertabby wrote: »

It will be your benefits accrued up to the day you stopped working, plus annual cost of living increases. Of course it won't be what you would have accrued if you had continued to work/pay into the scheme until 67, because you/your employer would have ceased contributions at 60. Not getting something you haven't paid for isn't a penalty !

The NHS 2015 pension scheme is Career Average Revalued Earnings. It's accumulated at the rate of 1/54 of earnings. In simple terms if you earn £54K in a tax year then your pension at retirement will be £1K. The pension is uprated each year until you draw it by the CPI.

Bottom line is that the 2015 pension scheme is effectively deferred salary paid after retirement & what you get then for the years that you earned the pension will be the same as if you had continued contributing for more years.

20yearnhsguy

Thx guys - that’s cleared up my v naive question. Think I’m getting my head around it and don’t think I’m in a bad position actually. I need to make sure I pay into a sipp for next 15 years, without going over my limit (I will check that out) to tide me over between 60-67 (with my 1995 pension) before collecting my 2015 pension. Sipp research next!