NHS vera at 57 or stay until 60 but take hit on CARE VERA

Fife59

hi all

the new changes to the NHS ruling re case taken to court means that my 1995 scheme which I tapered to in 2016 will be moved to 2022
at 2022 I will have 37 years in the 1995 scheme and prior to that  -- if I go at 57 I will take a hit on pension and lump sum

however if I stay I will input about £450 a month to the Care scheme for 3 years , but with the NPA of 67 , to take it earlier would mean a yearly pension of £2300 so I would be years before I was even with what I put in . 

I have asked SPPA this but they are snowed under so I thought I would see if anyone knew or had thoughts on an aspect. 
Can I at 57 stay in the 2015 scheme , stay working at same job but leave the CARE scheme. thus I wouldnt take the hit on the  1995 scheme or CARE scheme as I wouldnt be paying it to it

hope that makes sense

hugheskevi

Fife59 said:

the new changes to the NHS ruling re case taken to court means that my 1995 scheme which I tapered to in 2016 will be moved to 2022
at 2022 I will have 37 years in the 1995 scheme and prior to that  -- if I go at 57 I will take a hit on pension and lump sum

however if I stay I will input about £450 a month to the Care scheme for 3 years , but with the NPA of 67 , to take it earlier would mean a yearly pension of £2300 so I would be years before I was even with what I put in . 

Contributing £450 p/m for 3 years would cost £12,960 net of basic rate tax relief. A pension of £2,300 after basic rate tax would be £1,840.

After 7 years the cost of contributions would have been recovered (ignoring inflation increases and any loss of investment opportunity on the contribution. You would then have approximately 20 remaining years of profit based on average life expectancy.

Fife59 said:

Can I at 57 stay in the 2015 scheme , stay working at same job but leave the CARE scheme. thus I wouldnt take the hit on the  1995 scheme or CARE scheme as I wouldnt be paying it to it

You cannot stay in the 2015 scheme and leave the CARE scheme, they are joined - you are active in both or deferred in both.

I think what you are asking in a rather complicated way is can you opt-out of the pension scheme and carry-on working until age 60 and claim your 1995 pension at age 60. Setting aside whether this is a sensible financial decision or not, the answer is yes.

cattom

so just trying to work this out. is your nhs pension in addition to your state pension. I work in the private sector so I will get my private pension as well my state pension. both of which I've paid into nearly all my working life. does the same apply to you?

GunJack

cattom said:

so just trying to work this out. is your nhs pension in addition to your state pension. I work in the private sector so I will get my private pension as well my state pension. both of which I've paid into nearly all my working life. does the same apply to you?

yes, the nhs is an occupational pension, independent of SP.

Redsox64

I think your question it about protected NPA  under the old scheme and therefore implications for early retirement reductions, and whether there are dis-benefits to staying in the CARE scheme post 2022. I understand that when you retire you are given both options but I think the problem is there may be decisions to be made that have implications for your pension prior to 2022. I would be interested in others views. 

Fife59

Thanks for everyone who has answered , 

Fife59

hugheskevi said:

Fife59 said:

the new changes to the NHS ruling re case taken to court means that my 1995 scheme which I tapered to in 2016 will be moved to 2022
at 2022 I will have 37 years in the 1995 scheme and prior to that  -- if I go at 57 I will take a hit on pension and lump sum

however if I stay I will input about £450 a month to the Care scheme for 3 years , but with the NPA of 67 , to take it earlier would mean a yearly pension of £2300 so I would be years before I was even with what I put in . 

Contributing £450 p/m for 3 years would cost £12,960 net of basic rate tax relief. A pension of £2,300 after basic rate tax would be £1,840.

After 7 years the cost of contributions would have been recovered (ignoring inflation increases and any loss of investment opportunity on the contribution. You would then have approximately 20 remaining years of profit based on average life expectancy.

Fife59 said:

Can I at 57 stay in the 2015 scheme , stay working at same job but leave the CARE scheme. thus I wouldnt take the hit on the  1995 scheme or CARE scheme as I wouldnt be paying it to it

You cannot stay in the 2015 scheme and leave the CARE scheme, they are joined - you are active in both or deferred in both.

I think what you are asking in a rather complicated way is can you opt-out of the pension scheme and carry-on working until age 60 and claim your 1995 pension at age 60. Setting aside whether this is a sensible financial decision or not, the answer is yes.

thanks so much for that really helpful, I hadnt thought about the calculations and then taking tax into account

saucer

Redsox64 said:

I think your question it about protected NPA  under the old scheme and therefore implications for early retirement reductions, and whether there are dis-benefits to staying in the CARE scheme post 2022. I understand that when you retire you are given both options but I think the problem is there may be decisions to be made that have implications for your pension prior to 2022. I would be interested in others views. 

I did a rough calculation for myself and the McCloud judgement made only marginal difference to me, whichever option I eventually go for. My circumstances are c. 30 years in 1995 scheme with NPA of 60 and currently (at 52) 6 years in CARE scheme. The essential thing to bear in mind is that the generous rate at which the CARE pension grows may well compensate for a lot of the penalty you will take for retiring before NPA. It will depend on your circumstances and, in particular, how your salary has changed. Also remember you can take any 1995 or 2008 scheme pension (without reduction) at NPA (60 for 1995, 65 for 2008) and take the 2015 CARE scheme later at the NPA, 66 or 67. 

Fife59

Thanks for everyone who answered and gave me food for thought