NHS Pension - Starting at Aged 49 - Is it Worth It?

RiffRAF

Hi
I left the Armed Forces after almost 28 years with an immediate pension, which is a combination of AFPS75 and AFPS15. I'm due to start a part-time HR role at a local medical practice, and just wondered if it's actually worth enrolling onto the NHS pension scheme at age 49.

Any advice or guidance gratefully received.

Silvertabby

RiffRAF said:

Hi
I left the Armed Forces after almost 28 years with an immediate pension, which is a combination of AFPS75 and AFPS15. I'm due to start a part-time HR role at a local medical practice, and just wondered if it's actually worth enrolling onto the NHS pension scheme at age 49.

Any advice or guidance gratefully received.

Absolutely.  You'd be refusing 'free' money if you don't.
Spoken as an RAF and LGPS pensioner.

Dazed_and_C0nfused

And almost certainly volunteering to pay more tax than you need to.  Which not many people can claim to do 

SonOf

and just wondered if it's actually worth enrolling onto the NHS pension scheme at age 49
it will beat every alternative by a country mile.   Nothing will come close.

Sailtheworld

RiffRAF said:

I'm due to start a part-time HR role at a local medical practice, and just wondered if it's actually worth enrolling onto the NHS pension scheme at age 49.

The taxpayer will be crossing their fingers that you don't join. That might help inform your decision.

Stubod

..no brainer..just join it....

AnotherJoe

"I'm 49 and saw a £50 note  on the pavement yesterday  but didn't bother to pick it up because I'll be retiring in 10 years time so it didn't seem worth it. Same again this morning ". 

Dox

I think you'll have got the gist of what others think. What really interests me is why you think it would NOT be worth joining? That's where the real misunderstanding would seem to lie.

zagubov

If you could easily plant and tend a money tree in your back garden and go out and collect the banknotes growing on it in a decade or so's time, would you seriously not do it?

JoeCrystal

RiffRAF said:

Any advice or guidance gratefully received.

Worth it? It is a great way to get free money once you get an NHS pension. Most people outside the public sector would love to have such a generous pension scheme. Would you be willing to take at least a third of your salary as a pay cut? That is how much it is worth, and it is likely to be an underestimation as well.

As you mentioned that you are a part-timer and did not specify how high your salary will be, I would assume that you are on a salary of £15,000 which is the lowest contribution rate for the NHS pension at 5%. Let says that you stayed on and decide to access your NHS pension at the SPA at 67 so 18 years worth of service.

Assuming that your pay matches the CPI for the entire period, accruing at 1/54th and revalue at CPI+1.5%, you can expect an index-linked annual pension of £5,691 at the monthly contribution of £62.50. Assuming nothing has changed for the next 18 years; you would have paid £13,500 for the NHS pension and thus can expect to recoup all the cost in a few years and therefore free money.

If I want to go for the index-linked joint-life annuity of £5,691 via DC pension scheme in 18 years, retiring at 67, I would need to contribute at least £737.50 per month and hope for a good market return. If I decided to go drawdown route, then it is slightly cheaper at £525 per month which make £62.50 per month looks like very, affordable and there are all bells and whistles like ill-health retirement and other aspects that don't come with the DC pension scheme as well. But it is not guaranteed, I have no idea what to expect in 18 years, it could be amidst in a prolonged recession or worse. I do not know!

gary83

Another vote for if you have the chance of a public service pension jump at it.

in addition if I was you, and I’m assuming you’ve just recently retired from the RAF and didn’t have the option to decide whether or not to move from AFPS 75 to AFPS 75/15 I’d go on the armed forces pension society website and read the latest news on there about that decision, once the dust has settled it would be well worth you spending £40 to join and get them to work out the figures for you and find out whether it’s in your best interest to revert to the 75 scheme.