Paying into NHS pension scheme

jackiepanda

Hi, I have recently gone back to working part time in the NHS (left for 12 months) I understand the benefits of contributing and thus my employer also contributing (GP practice) but the scheme does not look to be great especially for low paid part time workers. I have two other pensions from previous employment and wondering whether if I opt out of NHS workplace pension what happens to employer contributions ? Just checked my figures online and it does not look as if its updated in real time as figures for 2019 look like I only earned £800 for the whole tax year !!!!

Pension_Geek

Your NHS scheme is not a 'pot', its a future pension. It will be revalued each year and the figure you have is for a yearly pension, not a fund value. Regardless of your salary, it is probably as good a deal as you can get from a pension.

Dazed_and_confused

Some lower earners may not benefit from pension tax relief but even without this you are unlikely to be able to get as good a return on your "investment" as the NHS pension pays.

Do you really mean earned as in salary or do you mean you have earned a pension of £800 from last year's contributions? Which will have an element of inflation increase. And will be paid every year from pension age. For the rest of your life.

If you opt out you are giving away free money.

crv1963

jackiepanda wrote: »

Hi, I have recently gone back to working part time in the NHS (left for 12 months) I understand the benefits of contributing and thus my employer also contributing (GP practice) but the scheme does not look to be great especially for low paid part time workers. I have two other pensions from previous employment and wondering whether if I opt out of NHS workplace pension what happens to employer contributions ? Just checked my figures online and it does not look as if its updated in real time as figures for 2019 look like I only earned £800 for the whole tax year !!!!

The scheme is a good one. I know because I have reached the stage of being about to claim mine!

All of your individual pensions may seem to offer small amounts of income because you are still accumulating them. All these small amounts add up when you take them.

If you opt out you also are opting out of the generous sick pay rules, the death in service benefits and survivors pension. If you opt out then the employers contribution is lost to you so effectively giving yourself something approaching a 20% pay cut.

TRS is not updated in real time.

ToxicWomble

I would like to mention tho, if you are at the stage of claiming yours then you ate probably on the 1995 section which was arguably more generous and had the ability to retire earlier with fewer penalties.
The newer section, whilst still a very good pension, does penalise heavily for claiming before the age of 67. (Something in the region of 5% lost value per year)

xylophone

I have two other pensions from previous employment and wondering whether if I opt out of NHS workplace pension what happens to employer contributions ?

You don't get them.

crv1963

ToxicWomble wrote: »

I would like to mention tho, if you are at the stage of claiming yours then you ate probably on the 1995 section which was arguably more generous and had the ability to retire earlier with fewer penalties.
The newer section, whilst still a very good pension, does penalise heavily for claiming before the age of 67. (Something in the region of 5% lost value per year)

Yes I am in the 1995 section and do recognise it is more generous but what is on offer now the 2015 section is also as you suggest a good pension scheme to have.

jackiepanda

13 years before I can claim.

jackiepanda

States annual NHS income was £800 no idea where that figure has come from as not my salary.

crv1963

jackiepanda wrote: »

States annual NHS income was £800 no idea where that figure has come from as not my salary.

Is that from the TRS? You could ring the NHS Pension Service for clarity.

nigelbb

The NHS 2015 system is simple to understand. It's effectively a large chunk of your salary that is paid in retirement. Each year you earn a pension that is 1/54 of your salary. If your salary is £54K you earn £1K pension. If it's £27K you earn £500 pension. That pension will be paid from state retirement age for as long as you live which on average will be over 20 years. In the examples that's an index linked £20K or £10K on top of your salary ie around an index-linked extra 40% of your salary is paid in retirement. Contributions are on a sliding scale with low paid workers paying as little as 5% & high earners up to 14.5%.