NHS contracting out

Pault10

Hi Team,

I worked for the NHS for over 46 years and paid full stamp but when it came to getting my state pension I was shocked to find it was £50 a month down on full state pension.

When I enquired to DWP I was told it was because the NHS paid less to NI to top up Superannuation and it was standard practice for the  public sector to do this without tell their workforce I never agreed to this and do not understand what they were doing.With superann your amount is based on grade and no amount of money put in by the

NHS will change that so what would topping up the workforce NI be of any value to the individual.

(Removed by Forum Team)

HappyHarry

Suggest you remove your phone number and email address asap.

daveyjp

And do some research into 'NHS contracting out of SERPS'

Nebulous2

Hi and welcome to MSE. 

There are a lot of misunderstandings in your post - pretty much all pension schemes did the same, and you paid less NI, not the NHS. 

You may also have the opportunity to make up your pension by paying voluntary NI. Someone else will be along to give more detail. 

However - please edit your post and remove your personal information. This is a public forum and you will benefit from a degree of anonymity. 

dunstonh

I worked for the NHS for over 46 years and paid full stamp but when it came to getting my state pension I was shocked to find it was £50 a month down on full state pension.

What is your definition of a full state pension?
At 46 years employment you have seen multiple state qualification periods.   The bulk of which involved contracting out.        That period saw you pay lower National Insurance than those contracted in and the benefits increased in the occupational pension instead.

When I enquired to DWP I was told it was because the NHS paid less to NI to top up Superannuation and it was standard practice for the  public sector to do this without tell their workforce I never agreed to this and do not understand what they were doing.With superann your amount is based on grade and no amount of money put in by the

a)  you were told about it.  It was in the scheme booklet from the day it was introduced.
b) Not just the employer paid lower NI but also the employee.
c) you did agree to by deciding to become a member of the pension.

The one bit that appears to be true is  "do not understand what they were doing"

Rather than rant on an internet forum, you could calm down and learn about it.    There is nothing weird, unusual or wrong here and you are not out of pocket.  Indeed, you may actually be financially better off as a result of the changes.

Marcon

Pault10 said:

Hi Team,

I worked for the NHS for over 46 years and paid full stamp but when it came to getting my state pension I was shocked to find it was £50 a month down on full state pension.

You didn't pay 'full stamp' (see below). You are under 'transitional' arrangements given that you must have started your working life well before 2016, so there is no 'full state pension' figure readily available in your case.

When I enquired to DWP I was told it was because the NHS paid less to NI to top up Superannuation and it was standard practice for the  public sector to do this without tell their workforce I never agreed to this and do not understand what they were doing.With superann your amount is based on grade and no amount of money put in by the

NHS will change that so what would topping up the workforce NI be of any value to the individual.

Both the employer (the NHS) and the employee (you) paid lower NI while you were a contributing member of the NHS pension scheme, so you had the benefit of higher take-home pay - and of course you got tax relief on your own contributions.

You will have been given full details of the scheme at the time you started work, and your contract of employment will (by law) have stated that your employment was contracted out of the State Additional Pension at the time you joined the NHS. 

Information about contracting out has been readily available online for many years.

Your alternative to being '£50 a month down' would have been opting out of the NHS pension scheme and losing any entitlement to benefits from the scheme. I suspect with 46 years of service the benefits you are getting might be rather more than £50 a month!

Pault10

IT WAS NEVER  DISCUSSED AND MY HMRC SAYS 40= YEARS FULL NI 

Pault10

I UNDERSTOOD THE PENSION WAS BASED ON GRADE FOR THE LAST 3 YEARS NOT ON WHAT NI WAS PAIDS

Pipthecat

Please edit and remove your contact details else you could have pension scammers calling

xylophone

At 6/4/16 (inception of NSP), your starting amount for new state pension was calculated as the higher of your entitlement under the old and new schemes.

In your case, your entitlement under the old scheme would have been a full basic state pension plus  (Additional State Pension - Deduction for Contracting Out).

£119.30 + (ASP - Deduction for Contracting Out).


Under the new scheme, it would have been a full NSP minus your Contracted Out  Pension Equivalent.

£155.65 - COPE.

Your SA was under a full NSP.

How old were you at 6/4/16?

If you had a number of years from 6/4/16 up to the tax year before that in which you would reach SPA, there was the possibility of improving your starting amount up to (but not in excess of) a full NSP by contributions/credits to make those years qualifying years. 

https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet

https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf was produced to coincide with the introduction of NSP.

Marcon

Pault10 said:

I UNDERSTOOD THE PENSION WAS BASED ON GRADE FOR THE LAST 3 YEARS NOT ON WHAT NI WAS PAIDS

You're confusing two things. Your NHS pension is based on grade/salary; your state pension is based on your NI contribution history.

Pault10 said:

IT WAS NEVER  DISCUSSED AND MY HMRC SAYS 40= YEARS FULL NI 

At the time you started employment with the NHS, membership of the pension scheme was compulsory - but you could have chosen to opt out of the scheme (and miss out on fantastic benefits) at any time from April 1988, when the law change to make membership of a pension scheme optional rather than a condition of employment.

'Full NI' simply means you've built up a year of NI contributions high enough to qualify for the basic state pension. There is a deduction for being a member of a 'contracted out' pension scheme, and that deduction is taken into account when working out the starting level of your state pension.