Should I claim my NHS pension

Onebrokelady

Hi 
I do not understand pensions and have a question 
I was thinking of taking my NHS pension when I reach 60 in June and then continuing to work in my current role. The pension I want to take is the 1995 section. Will this negatively impact me financially. I realise it's a final salary pension which is bad news for me because I have had to cut my hours due to ill health so I now earn much less than I used to as I'm only working 22.5 hours a week now.

I received this letter this week but I don't understand it. If someone could kindly explain it I would be very grateful.
Thank you

Dazed_and_C0nfused

I realise it's a final salary pension which is bad news for me because I have had to cut my hours due to ill health so I now earn much less than I used to as I'm only working 22.5 hours a week now.

That should be irrelevant.  It's your full time equivalent salary which is important.

Dropping hours simply means you accrue additional pension at a slowe rate.

Or did you change grade when dropping some hours?

Onebrokelady

Dazed_and_C0nfused said:

I realise it's a final salary pension which is bad news for me because I have had to cut my hours due to ill health so I now earn much less than I used to as I'm only working 22.5 hours a week now.

That should be irrelevant.  It's your full time equivalent salary which is important.

Dropping hours simply means you accrue additional pension at a slowe rate.

Or did you change grade when dropping some hours?

No I'm the same band I've always been 

CKhalvashi

It means you are at your pension scheme normal retirement age (60 in your case under the 1995 scheme) and can therefore take your benefits or let them accrue further. Part time work simply means you'll accrue at 60% for each year of service instead of 100% but the final salary link will remain at the full time equivalent (to keep it simple, if you have 5 years at 100% and 5 years at 50% on a 1/100 contract, you'll have 7.5% of the highest of last 3 years FTE, so if your highest pay for the 3 years was £5000 on 50%, this would be £10,000 FTE, so in this example £750). These are not actual accrual numbers and are only for simplicity.

Mom is in the middle of an application to retire and return at the moment (part time on a lower band contract but on a mix of older pensions and the latest scheme for a few years), so if you have any questions I'm happy to ask her as NHS pensions aren't my specialist area of knowledge.

Onebrokelady

CKhalvashi said:

It means you are at your pension scheme normal retirement age (60 in your case under the 1995 scheme) and can therefore take your benefits or let them accrue further. Part time work simply means you'll accrue at 60% for each year of service instead of 100% but the final salary link will remain at the full time equivalent (to keep it simple, if you have 5 years at 100% and 5 years at 50% on a 1/100 contract, you'll have 7.5% of the highest of last 3 years FTE, so if your highest pay for the 3 years was £5000 on 50%, this would be £10,000 FTE, so in this example £750). These are not actual accrual numbers and are only for simplicity.

Mom is in the middle of an application to retire and return at the moment (part time on a lower band contract but on a mix of older pensions and the latest scheme for a few years), so if you have any questions I'm happy to ask her as NHS pensions aren't my specialist area of knowledge.

Thanks that would be great. I would be staying on my current band and hopefully the same hours (22.5) 

CKhalvashi

Onebrokelady said:

CKhalvashi said:

It means you are at your pension scheme normal retirement age (60 in your case under the 1995 scheme) and can therefore take your benefits or let them accrue further. Part time work simply means you'll accrue at 60% for each year of service instead of 100% but the final salary link will remain at the full time equivalent (to keep it simple, if you have 5 years at 100% and 5 years at 50% on a 1/100 contract, you'll have 7.5% of the highest of last 3 years FTE, so if your highest pay for the 3 years was £5000 on 50%, this would be £10,000 FTE, so in this example £750). These are not actual accrual numbers and are only for simplicity.

Mom is in the middle of an application to retire and return at the moment (part time on a lower band contract but on a mix of older pensions and the latest scheme for a few years), so if you have any questions I'm happy to ask her as NHS pensions aren't my specialist area of knowledge.

Thanks that would be great. I would be staying on my current band and hopefully the same hours (22.5) 

What do you want to know specifically?

It'll help more I think if I can give you information you specifically need to point you to the scheme rules instead of something more general.

Stubod

I don't think there is much of a financial "gain" by not taking your 1995 pension at 60. Under current rules if you are in the 1995 scheme you can't continue to pay into the NHS scheme when you return to work, BUT the rules are a changing as from April this year so it is worth checking the new rules.

NB If you "retire and return" you will be on a new contract as they (nhs) actually "re-employ you", but this should not be a problem as they are trying to encourage people to stay. At 60 you will get a tax free lump sum of 3* your annual pension.

Whatever you do do not take any "extra" lump sum as this is not really cost effective. for the later schemes there is no "compulsary" lump sum.

Obviously you will be taxed on your total income which will include your NHS pension.

Just as an asside, I recently went through the "Retire and Return" so I could claim my earlier peniosn and it has been a complete nightmare. Despite filling in the relevant AW8 forms and R&R request forms with 3 months notice, everything that could could go wrong did. In fact nothing went right, from delays in payments, removed from all their systems, unable to get paid for work already completed etc. etc. To date 200+ emails and many hours on the telephone and sending 4 official complaints to various departments trying to sort things out! (It took one GP I know 8 months before they actually got their first pension payment!).

...but you may be lucky..?

GrubbyGirl_2

As others have said the fact you are part time is irrelevant as your final salary pension is based on the full time salary.  Only you can make the decision about whether it makes financial sense but remember it's likely NHS pay scales will get a good hike in 2023/24 so it might be worth putting off retiring until pay increases are announced so your pension is based on new salary scales

Onebrokelady

CKhalvashi said:

Onebrokelady said:

CKhalvashi said:

It means you are at your pension scheme normal retirement age (60 in your case under the 1995 scheme) and can therefore take your benefits or let them accrue further. Part time work simply means you'll accrue at 60% for each year of service instead of 100% but the final salary link will remain at the full time equivalent (to keep it simple, if you have 5 years at 100% and 5 years at 50% on a 1/100 contract, you'll have 7.5% of the highest of last 3 years FTE, so if your highest pay for the 3 years was £5000 on 50%, this would be £10,000 FTE, so in this example £750). These are not actual accrual numbers and are only for simplicity.

Mom is in the middle of an application to retire and return at the moment (part time on a lower band contract but on a mix of older pensions and the latest scheme for a few years), so if you have any questions I'm happy to ask her as NHS pensions aren't my specialist area of knowledge.

Thanks that would be great. I would be staying on my current band and hopefully the same hours (22.5) 

What do you want to know specifically?

It'll help more I think if I can give you information you specifically need to point you to the scheme rules instead of something more general.

I just want to know if it would be detrimental to take my pension and carry on working.will it be reduced or have any financial consequences 

Onebrokelady

Stubod said:

I don't think there is much of a financial "gain" by not taking your 1995 pension at 60. Under current rules if you are in the 1995 scheme you can't continue to pay into the NHS scheme when you return to work, BUT the rules are a changing as from April this year so it is worth checking the new rules.

NB If you "retire and return" you will be on a new contract as they (nhs) actually "re-employ you", but this should not be a problem as they are trying to encourage people to stay. At 60 you will get a tax free lump sum of 3* your annual pension.

Whatever you do do not take any "extra" lump sum as this is not really cost effective. for the later schemes there is no "compulsary" lump sum.

Obviously you will be taxed on your total income which will include your NHS pension.

Just as an asside, I recently went through the "Retire and Return" so I could claim my earlier peniosn and it has been a complete nightmare. Despite filling in the relevant AW8 forms and R&R request forms with 3 months notice, everything that could could go wrong did. In fact nothing went right, from delays in payments, removed from all their systems, unable to get paid for work already completed etc. etc. To date 200+ emails and many hours on the telephone and sending 4 official complaints to various departments trying to sort things out! (It took one GP I know 8 months before they actually got their first pension payment!).

...but you may be lucky..?

Thanks this is what I wanted to know 😊 according to the info I've got if I retire and return onto a new contract I will be enrolled on the 2015 scheme because I'm a transition member who is on both at the moment 

I have heard so many nightmare stories of people trying to claim their pension and not getting paid 😳 this is what happens when you outsource it to a company and don't keep it in-house. I suppose I would have my wages to live on while I waited though 🤷‍♀️

Edited to add I was going to take the smaller lump sum and pay off the last bit of my mortgage 

Onebrokelady

GrubbyGirl_2 said:

As others have said the fact you are part time is irrelevant as your final salary pension is based on the full time salary.  Only you can make the decision about whether it makes financial sense but remember it's likely NHS pay scales will get a good hike in 2023/24 so it might be worth putting off retiring until pay increases are announced so your pension is based on new salary scales

I'm not 60 until June so I was going to wait until then anyway 😊