NHS pension, leave before vesting period or wait

harlequinnyc

I have worked in the NHS for just short of 2 years and am considering leaving very soon.  I have been told that I can have a refund of my contributions but would it be worthwhile to hang on until I reach the 2 year vesting period and defer the pension? Granted, it will be worth next to nothing, as I have been paying in for such a short time but would I keep death benefit, etc? I gather it would increase until I claim at SPA, so I may as well leave it in? Sorry, stupid question maybe.

greatkingrat

2 years NHS pension won't be a fortune, but it will still be far better than any alternative. Any refund will only be of your contributions, so you would essentially be losing the employers contributions.

Dazed_and_C0nfused

And your contributions would have non refundable tax deducted as well.  Refund is not a good option.

Marcon

harlequinnyc said:

I have worked in the NHS for just short of 2 years and am considering leaving very soon.  I have been told that I can have a refund of my contributions but would it be worthwhile to hang on until I reach the 2 year vesting period and defer the pension? Granted, it will be worth next to nothing, as I have been paying in for such a short time but would I keep death benefit, etc? I gather it would increase until I claim at SPA, so I may as well leave it in? Sorry, stupid question maybe.

An alternative to a refund (if you under two years NHS scheme membership) is a transfer to another pension arrangement, which would mean you get the benefit of the employer's contributions. To do this you must have joined your new pension arrangement within 12 months; and apply for the transfer within 12 months of joining your new arrangement.

You don't keep the death benefit once you've left 'active' (contributing) membership of a pension scheme unless you remain in employment and the employer offers a standalone DIS benefit scheme.

nigelbb

Your NHS pension is basically deferred salary paid in retirement. It accumulates at 1/54 of your salary ie if your salary was £54,000 then your pension will be worth an index linked £1,000 per year. Given average life expectancy at retirement a £1,000 pension is worth around £20,000 in total. This means the NHS pension amounts to an extra 35-40% of your salary.

NedS

Often you can circumvent the 2 year rule in such schemes by purchasing extra pension through the scheme, or transferring in another private pension into the NHS scheme. It may be worth investigating if either scenario apply to the NHS scheme, and if they do either purchasing some extra pension (probably the easier option) or opening a small SIPP and transferring it into the NHS scheme.