To move NHS pension into Civil Service pension or not?

tink17

Hi, firstly apologies for my ignorance, as I don't know much about pensions and hope you can help.

I've been offered a job that provides the Alpha Civil Service pension, and they have said I can enquire as to moving my current NHS pension into the new one, or I can just keep my NHS pension the way it was, and start the Civil Service one from scratch.

Can anyone advise as to which is the better option? I'm 30, and I've had my NHS pension for 6 years and 4 months. I might return to the NHS in future, but it's equally likely that I might decide to stay where I am.

If there's any other info I can provide that would help anyone give their advice or opinion, please let me know.

Thanks!

MX5huggy

You need to get the quote from Alpha showing the pension they will give you in comparison with NHS option. Once you have both figures you can make a decision. 

The NHS pension is revalued by CPI plus 1.5% Alpha by only CPI. The Alpha option would have to be a good bit larger to offset this advantage of the NHS over the next 30 plus years. 

tink17

I can't continue with my NHS pension in the new job though so I only have the option of leaving it as it is, or transferring it into the new Civil Service pension. Would I be better off having the one pension through the Civil Service and then if I ever go back to the NHS, think about transferring it back then (or keeping a Civil Service pension and starting a new NHS pension), or would I be better off leaving my NHS pension where it is and starting a new Civil Service one from scratch with nothing in it? I don't think I'll have much in my NHS pension if I've only had it for 6 years?

MX5huggy

No one can tell whether leaving the pension you have built up with NHS in the NHS scheme or moving it to Alpha is the best until you have got the transfer value from Alpha. Do this then come back. 

Your NHS pension will be roughly worth 1/54 of your total gross pay from the last 6 years so if you’ve been paid £25000 per year that’s £2777 that is you will get a pension of £2777 pounds every year from your retirement age (you can retire earlier but that will reduce the annual payment). That’s ignoring inflation up lifts of the last 6 years. The pension is index linked so it will be much more than £2777 by the time you get it but equally a loaf of bread will be much more than today as well. 

hugheskevi

Presumably you are in the 2015 NHS scheme?

This would be a Club Transfer. This means the value of your 2015 NHS pension is moved across to the Civil Service pension scheme, ring-fenced, and increased by the same amount as it would have been had you remained in the NHS, ie, CPI+1.5%.

If you leave the pension in the NHS, it simply increases by CPI.

So taking a Club Transfer will almost certainly be best.