NHS Pension Query

Mr_Why

I have around 28 years in the nhs 1995 scheme. However in 2018 I moved over to the 2015 scheme, and that is what I am paying into now. I was now to opt out would my 1995 pension be frozen? I only want to opt out for a couple if years to clear some debt. Any advice is most welcome. 

Thrugelmir

Keep the pension going. Default on the unsecured debt. Then come to an arrangement with your creditors. 

crv1963

I agree with Thrugelmir. You may feel overwhelmed by debt or struggle at the moment but you definitely don't want to be struggling through your retirement because of a self imposed pension reduction. I hear lots of people who have opted out don't ever start it again because "the time isn't right and I can't afford it yet!".

Dazed_and_C0nfused

Mr_Why said:

I have around 28 years in the nhs 1995 scheme. However in 2018 I moved over to the 2015 scheme, and that is what I am paying into now. I was now to opt out would my 1995 pension be frozen? I only want to opt out for a couple if years to clear some debt. Any advice is most welcome. 

To add to the previous responses do you also realise that if you were to go ahead and do this then unless you are a very low earner you would be voluntarily agreeing to pay more income tax each month?

Mr_Why

Thanks guys. Will give it more thought, had no idea about the income tax.

sm50

There are a few other benefits to also consider like employer contribution and a pension that has protection against inflation built in. 

Dazed_and_C0nfused

Mr_Why said:

Thanks guys. Will give it more thought, had no idea about the income tax.

If you check a recent payslip you will find something like,/ the example below

Salary £2,000
Pension contribution £180
Taxable pay £1,820

If you stop contributing your taxable pay would be £2,000.

Andy_L

Mr_Why said:

I have around 28 years in the nhs 1995 scheme. However in 2018 I moved over to the 2015 scheme, and that is what I am paying into now. I was now to opt out would my 1995 pension be frozen? I only want to opt out for a couple if years to clear some debt. Any advice is most welcome. 

My advice would be to wander over to the debt-free wannabe board & find another way to clear your debts than giving up ~20% of your renumeration
https://forums.moneysavingexpert.com/categories/debt-free-wannabe

zagubov

Also, your pension might include life insurance, important if you've a mortgage to pay off.

crv1963

zagubov said:

Also, your pension might includes life insurance, important if you've a mortgage to pay off.

Indeed it does, at 3 times your base salary, and sick pay of 6 months full pay followed by 6 months half pay instead of simply getting SSP.

nigelbb

crv1963 said:

zagubov said:

Also, your pension might includes life insurance, important if you've a mortgage to pay off.

Indeed it does, at 3 times your base salary, and sick pay of 6 months full pay followed by 6 months half pay instead of simply getting SSP.

The death in service benefit is only available to those in active pensionable employment but sick pay is available to all NHS employees whether in the pension scheme or not. How much you get depends on length of service. During the first year of service you get one month’s full pay and two months’ half pay. During the second year of service it's two month’s full pay and two months’ half pay etc rising to  6 months full pay followed by 6 months half pay after 5 years of service.