NHS pension transfer or withdraw cash

Stubod

..if you have the opportunity to be in the NHS pension scheme, then to do anything other than continue to pay into it would be incredibly silly!!!

dunstonh

In 11 years time,when we are 67 and looking to retire,we are possibly looking to either:

Transfer this to her SIPP,at that time or...

Withdraw the whole lot and put into THE SIPP,so more flexible

You cannot do either of those things.  

I understand she can draw out  25% tax free,BUT can she withdraw the rest but pay tax on it ?

No. There is no 25% tax free lump sum.  There is a pension commencement lump sum that is calculated using a defined method but as there is no pot, the 25% rule does not apply.

Even the NHS pension dept can't or won't give her an answer

They cannot. They are not financial advisers and do not hold advice permissions.  They have more scope than most to help but they cannot get into personalised advice.

Silvertabby

dunstonh said:

Even the NHS pension dept can't or won't give her an answer

They cannot. They are not financial advisers and do not hold advice permissions.  They have more scope than most to help but they cannot get into personalised advice.

True, but they should at least have said that once OP's wife passes the 2 year vesting period a transfer out to a SIPP wouldn't be possible, and why. 

Nurse2047

If she looks on her total rewards statement it should give her her the current value of pension for 2020-2021 section standard benefits. 

This is her guaranteed annual pension Presently 

eg 

Pension	£1,910.66
Lump Sum	-
Adult Dependant Pension	£644.85
Hypothetical Annuity Cost	£95,533.00

Nurse2047

She pays 1/54th of her pensionable pay into this annually 

marlot

brucieboy said:

OK thanks for that ....so we anticiapate that the value at around age 67 ,it will be about £50k,which won't give a lot a month.....

You're completely misunderstanding the scheme.

There are two types of pension scheme.

In a defined contribution scheme (eg. your existing SIPPs), a known amount of money is contributed each month.  That forms a 'pot', which can be invested.  It might do well.  It might not.  You carry the risk.  At retirement, you have flexibility to spend it as you please.

In a defined benefits scheme (eg. the NHS), you build up a promise of a future monthly income when you retire.  That future monthly income is predetermined by a formula based on the employees earnings history, years of service and age.  It is regarded as a highly valuable thing.  There is no pot.  There is less flexibility.  But there is a very valuable promise of monthly income.

I would strongly advise you to take up a free consultation with pension wise - they'll explain it much more clearly than I can on a forum.

marlot

MFW2026 said:

She pays 1/54th of her pensionable pay into this annually 

I think I understand what you mean - but it is the promise that grows by 1/54th of her pensionable pay each year.

So if you earn £10,000 in the current tax year, you'll get 10,000/54 = £185 each year of retirement.
At the end of the year, that £185 is uprated by inflation + 1.5%.  Let's say 10% to keep the figure simple.  so 185+10% = £204

If you stay on in the same job, same pay, you add another £185 in each year of retirement.

So now you have a promise of 204+185 = 389 every year of retirement.
Again, that gets uprated by inflation.  If CPI stays high, that might be another 10% = £428 each year of retirement.  And that's after just two years of employment.

You can see why the NHS scheme is regarded as one of the very best around.

nigelbb

The NHS pension accumulates at 1/54 of salary ie if you earn £54,000 your pension is £1,000. Average life expectancy at retirement is around twenty years that's almost 40% of salary paid in retirement.

penners324

It would be utterly insane to come out of the NHS pension scheme 

Dazed_and_C0nfused

penners324 said:

It would be utterly insane to come out of the NHS pension scheme 

Let's just hope the op's wife has the sense to do her own research or reads this thread and realises the huge advantages with the NHS pension 🙂