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Take pensions and carry on working

SummerSolstice
Posts: 3 Newbie

I hope you can help me. I will be 60 in June and have three pensions that are all defined benefits schemes with 60 as the normal retirement date. They are all final salary pensions. One is a teaching pension in the old scheme, one with a retailer and one with a bank. I am still working and my employer is the NHS. I have been with them for over 6 years and with this scheme I will get the pension when I am 67 as it is in the new scheme.
My question is about whether I should take all the three pensions in June so I get access to the lump sums and income each month or hold off. I could do with the money to make home improvements but I read that if I take them I could only have £4k going into my NHS pension each year. Is that correct as my pensions are defined benefits schemes rather than defined contribution. I've tried reading up on it but it's not that clear. Apart from salary the only other real benefit in the NHS is the pension so I'd be reluctant to come out of it but if it means paying more tax maybe I should.
Any advice would be much appreciated. Thank you.
My question is about whether I should take all the three pensions in June so I get access to the lump sums and income each month or hold off. I could do with the money to make home improvements but I read that if I take them I could only have £4k going into my NHS pension each year. Is that correct as my pensions are defined benefits schemes rather than defined contribution. I've tried reading up on it but it's not that clear. Apart from salary the only other real benefit in the NHS is the pension so I'd be reluctant to come out of it but if it means paying more tax maybe I should.
Any advice would be much appreciated. Thank you.
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Comments
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SummerSolstice said:I hope you can help me. I will be 60 in June and have three pensions that are all defined benefits schemes with 60 as the normal retirement date. They are all final salary pensions. One is a teaching pension in the old scheme, one with a retailer and one with a bank. I am still working and my employer is the NHS. I have been with them for over 6 years and with this scheme I will get the pension when I am 67 as it is in the new scheme.
My question is about whether I should take all the three pensions in June so I get access to the lump sums and income each month or hold off. I could do with the money to make home improvements but I read that if I take them I could only have £4k going into my NHS pension each year. Is that correct as my pensions are defined benefits schemes rather than defined contribution. I've tried reading up on it but it's not that clear. Apart from salary the only other real benefit in the NHS is the pension so I'd be reluctant to come out of it but if it means paying more tax maybe I should.
Any advice would be much appreciated. Thank you.
With most DB schemes there is no benefit in delaying payment past the NPA but you would have to check the rules for each scheme to be certain (they usually don't pay anything for the period after NPA if you choose not to take the pension then).3 -
SummerSolstice said:I hope you can help me. I will be 60 in June and have three pensions that are all defined benefits schemes with 60 as the normal retirement date. They are all final salary pensions. One is a teaching pension in the old scheme, one with a retailer and one with a bank. I am still working and my employer is the NHS. I have been with them for over 6 years and with this scheme I will get the pension when I am 67 as it is in the new scheme.
My question is about whether I should take all the three pensions in June so I get access to the lump sums and income each month or hold off. I could do with the money to make home improvements but I read that if I take them I could only have £4k going into my NHS pension each year. Is that correct as my pensions are defined benefits schemes rather than defined contribution. I've tried reading up on it but it's not that clear. Apart from salary the only other real benefit in the NHS is the pension so I'd be reluctant to come out of it but if it means paying more tax maybe I should.
Any advice would be much appreciated. Thank you.
Whether you should hold off taking your DB pensions now depends on a number of things, including how that would impact on your tax position; whether they have a 'late retirement' factor (i.e. if you don't draw your benefits at the normal retirement age for the scheme in question, are your benefits increased because they are being paid later than expected); whether having a bumper spend now on home improvements might impact on your standard of living in later years.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!4 -
Thank you for the replies. I’m in the 2015 NHS pension which is defined contribution. My understanding is that the earlier 1995 and 2008 schemes were defined benefit schemes. I can’t remember where I read it but it was something about preventing recycling where pensions are taken to live on and then contributions to the current pension scheme is increased to £40k to take advantage of tax break. It was a while ago when I read it so it may be out of date. Any insight gratefully received.0
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SummerSolstice said:Thank you for the replies. I’m in the 2015 NHS pension which is defined contribution. My understanding is that the earlier 1995 and 2008 schemes were defined benefit schemes. I can’t remember where I read it but it was something about preventing recycling where pensions are taken to live on and then contributions to the current pension scheme is increased to £40k to take advantage of tax break. It was a while ago when I read it so it may be out of date. Any insight gratefully received.2
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SummerSolstice said:Thank you for the replies. I’m in the 2015 NHS pension which is defined contribution. My understanding is that the earlier 1995 and 2008 schemes were defined benefit schemes. I can’t remember where I read it but it was something about preventing recycling where pensions are taken to live on and then contributions to the current pension scheme is increased to £40k to take advantage of tax break. It was a while ago when I read it so it may be out of date. Any insight gratefully received.
Why do you think it is a DC scheme?3 -
SummerSolstice said:Thank you for the replies. I’m in the 2015 NHS pension which is defined contribution. My understanding is that the earlier 1995 and 2008 schemes were defined benefit schemes.2
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Thanks for the replies that’s really helpful. I think I got confused and thought because the NHS 2015 scheme is not final salary that it’s not a defined benefit scheme. Could I then take my pensions at 60 but increase my contributions to my NHS pension to reduce the amount of tax I pay at 40%?0
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SummerSolstice said:Thanks for the replies that’s really helpful. I think I got confused and thought because the NHS 2015 scheme is not final salary that it’s not a defined benefit scheme. Could I then take my pensions at 60 but increase my contributions to my NHS pension to reduce the amount of tax I pay at 40%?
I took my NHS pension then worked for them for a couple of years. Everything I earned was taxed at 40%, there was nothing I could do about it but at least I got 60% of the money1 -
Currently, you cannot take your 1995 scheme at 60 AND continue active membership in the 2015 scheme.
However, there is an on going government consultation (due to close on 30.01.23) introducing further nhs pension flexibilities, one of which would reverse this and allow you to take your 1995 scheme at NRA (or earlier) AND continue active membership in the 2015 scheme. If this goes ahead, its possible it would be implemented from late spring 2023.
https://www.gov.uk/government/consultations/nhs-pension-scheme-proposed-amendments-to-scheme-regulations/nhs-pension-scheme-proposed-amendments-to-scheme-regulations (see Pensionable Re-Employment section)
This would also then allow you to, not only be an further active member of the 2015 scheme, but also purchase additional pension/ERRBO/or MPAVC's etc (in addition to your regular pension contribution). This would then further reduce your 'Taxable' pay (easiest to purchase in instalments).
https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension
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Apologies SummerSolstice, I appreciate your old pensions are not nhs 1995/2008 schemes, and that your are only i the 2015 scheme, so perhaps the beginning of my previous post doesn't apply to you personally.
The latter, 2015 scheme additional pension info does however.1
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