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Auto enrolment on to new pension after claiming NHS pension and returning to (NHS) work.
Korkyb
Posts: 634 Forumite
I believe that returning to NHS employment following my "retirement" from the NHS pension scheme that I will be auto enrolled into a new pension (I wont be able to rejoin the NHS Scheme).
I understand that paying into this new pension will reduce the tax I pay but apart from that dont have much more information. (my pension is £25k ish so will be paying tax).
Questions I have are:
- Would it be worth increasing the amount I pay in? (?? its 5%).
- What happens to this money if I die? (would my wife be able to access it?).
- When I stop working would I be able to get hold of this money & if so would I have to pay tax?
If anyone can point me in the right direction it would be much appreciated.
Was it really "everybody" that was Kung Fu fighting ???
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Comments
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xylophone said:Unfortunately not - that just confirms that I'm unable to rejoin the NHS scheme.Thanks anyway.Was it really "everybody" that was Kung Fu fighting ???0
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https://www.nhsbsa.nhs.uk/sites/default/files/2017-03/Auto enrolment Employer FAQs (03.2017) (V7).pdf
Then will you be enrolled into NEST?
If not, which scheme will your employer offer?1 -
Presuming it’s a fairly standard Defined Contribution pension. Then yes it’s a good idea to pay in more, you get the tax relief on contributions then on withdrawals you get 25% out tax free, this has a 6.25% benefit without any growth of the investment.
Yes you wife can have the money, fill out the declaration of wishes.You can get hold of it before you stop working if you wish (there are reasons not to). You get 25% tax free then pay tax on the rest so if it is a lot pushing you into higher rate tax you would want to spread receiving it over a number of years.1 -
- Would it be worth increasing the amount I pay in? (?? its 5%).
Yes. Anything you pay into the pension tax wrapper gets tax relief and on withdrawal, if you remain a basic rate taxpayer, you pay less tax than the relief you obtained. i.e. free money.
- What happens to this money if I die? (would my wife be able to access it?).It is paid to your beneficiaries (wife in this case). She can either take it as a lump sum or convert it to a beneficiary drawdown pension and take withdrawals from it as needed. There are pros and cons on the different methods but she only needs to worry about that at the time of your death. No decision is needed in advance.
- When I stop working would I be able to get hold of this money & if so would I have to pay tax?yes and yes.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
xylophone said:https://www.nhsbsa.nhs.uk/sites/default/files/2017-03/Auto enrolment Employer FAQs (03.2017) (V7).pdf
Then will you be enrolled into NEST?
If not, which scheme will your employer offer?
Yes I believe it will be NEST that I'm enrolled in.Was it really "everybody" that was Kung Fu fighting ???0 -
NEST has an unusual charging structure. 1.8% of contributions then a flat Annual management charge (AMC) of 0.3%Korkyb said:xylophone said:https://www.nhsbsa.nhs.uk/sites/default/files/2017-03/Auto enrolment Employer FAQs (03.2017) (V7).pdf
Then will you be enrolled into NEST?
If not, which scheme will your employer offer?
Yes I believe it will be NEST that I'm enrolled in.
Most only charge an AMC but higher generally. NEST fee benefits those using them for years as you won’t be you may be better off looking elsewhere for somewhere to put additional pension payments. But you should stick with them for money from your job (ie don’t opt out).1 -
Information re NEST
https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension.html
https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/what-happens-to-my-pension-when-I-die.html
https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/contributions/make-additional-contributions.html
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Magic
Just what I needed.
Thanks all.Was it really "everybody" that was Kung Fu fighting ???1 -
Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.Korkyb said:I understand that paying into this new pension will reduce the tax I pay
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