Mhs vs LGA Pension

razoni

Hi I have recently been offered a new role which would moving from the LA and Local Government pension scheme to the NHS and the moving to that scheme. 

I was wanting to know which is better overall. My circumstances are...
I have worked in LA since 2015 and been paying into the LGA pension scheme since then at different levels of pay/contribution. 

Cyrrebtly aged 33 current salary in LA £51,000 and I make 6.8% contribution automatically. 

NHS new role would see me sit at Band 8C which is £65 664 with contributions at 12.5%. 

Obviously there are other decisions beside just the best salary and pension is something I need to think about.
 Thank you for any advice. 

GunJack

Both very similar schemes, based on CARE. You'd be wise to:-

1. check the current value of your LGPS pension, and 
2. Get a quote to transfer it into NHS scheme, you may find it's very good value. You'll have a year from starting with NHS to transfer in, and you won't be able to get the quote until you've started in NHS.

Obviously you'l also need to take into account any AVC you may have in LGPS.

MX5huggy

LGPS accrues at 1/49ths NHS at 1/54ths but NHS is revalued at CPI plus 1.5% each year LGPS only CPI. NHS costs more. 

With that pay rise you you’ll be better off in the NHS, Band 8c goes to £75k so your salary should rise without having to get another job, maybe you are at the top of the pay band in the LG job. 

As said get a transfer value from the NHS. 

I would be looking to make additional pension contributions to reduce your tax salary below the higher rate tax level or £50k if you have children and therefore would become eligible for child benefit if you did. 

xylophone

It may not be relevant to your position (because you'd never want to to it anyway) but remember that the LGPS is a funded  DB public service scheme so that a transfer out to a DC scheme  offering flexible benefits would be a possibility - such a transfer would not be possible from the NHS Scheme or other unfunded public service pension schemes.

https://techzone.abrdn.com/public/pensions/tech-guide-db-to-dc-transfers#anchor_3

Public sector schemes

Even though a member may have a statutory transfer right, unfunded public sector pension schemes (for example, the NHS Pension Scheme) cannot transfer benefits to a DC scheme capable of providing flexible benefits, such as income drawdown.

But transfers are allowed to DC schemes that don't provide flexible benefits. This allows members to transfer to buy conventional annuities, which could help those who are unlikely to get good value for money from their DB promise - for example, those in poor health or single people who have no need for a survivor's pension on their death.

Funded public schemes (for example, the Universities Superannuation Scheme) will allow transfers to DC schemes that offer income flexibility.

https://researchbriefings.files.parliament.uk/documents/CBP-8478/CBP-8478.pdf

razoni

MX5huggy said:

LGPS accrues at 1/49ths NHS at 1/54ths but NHS is revalued at CPI plus 1.5% each year LGPS only CPI. NHS costs more. 

With that pay rise you you’ll be better off in the NHS, Band 8c goes to £75k so your salary should rise without having to get another job, maybe you are at the top of the pay band in the LG job. 

As said get a transfer value from the NHS. 

I would be looking to make additional pension contributions to reduce your tax salary below the higher rate tax level or £50k if you have children and therefore would become eligible for child benefit if you did. 

Hi thanks for this...I didn't even think about how this would impact on child benefit. I have one child and we currently do recieve child benefit at the full amount. Do other contributions take into account this what is paid? For instance I currently pay student loan, childcare scheme, cycle scheme and pension and would expect to do similar in the nhs...possibly car lease scheme too if this would aid in reducing the impact on child benefit. 

All comments are really helpful and appreciated.

xylophone

https://www.gov.uk/child-benefit-tax-calculator might help.