Nhs ill health pension, what’s better long term?

unsteadyeddy

I have young onset Parkinson’s and work as a band 6 AHP. 

I’ve dropped to 4 days which has been manageable but increasingly difficult. 

I still want to work, for as long as possible. 

I have 19 years of pension accrued spread between the 1995 and 2015 scheme. 

From my limited understanding I can take tier 1 ill health retirement and return to work  ?? In same role but less hours (as long as earnings plus pension isn’t more than previous salery?) 

I struggle to understand the complexities of what will be better long term. 

Options A. Take tier 1 and use it as a way of reducing my hours to a manageable level whilst maintaining an almost similar income. 

Options b. Simply reduce my hours.

Option A would seem sensible but I can’t work out in my head if my pension would be more and I’d be financially better off say 10 years down the line if I just reduced my hours and maintained my large pension pot (would this large pot be worth more then than if I took tier 1 now and then worked less but still pensionable hours. Does interest come into the equation or is it a simple case of it will be the same? 

If I reduce hours to 2 days a week 
And retired in say 10 years, will 

A (tier one pension taken now) + B (pension accrued after taking tier one) be greater or less than 

C (total accrued pension earned working 2 days a week on top
of my current pension pot) 


I’ve managed to confuse myself so apologies with how badly I’ve explained my query! 

buzbyc

Hi eddy,

I’ve got young onset PD and am just going through the retirement process and hoping for Tier 2.  This means that hopefully I’ll get my normal pension early without it being reduced as it normally is if you take a pension early, and in addition to his my pension will be enhanced.

To receive Tier 1 you have to be deemed not able to do your current role, so as far as I’’m aware you can’t do what you suggest and use it as a way of reducing hours without any financial impact - although nice idea!  I reduced to 30hrs at the beginning of Jan 2021 but can’t afford to do this any further.

Something else to confuse you is the McCLoud judgement - I won’t event attempt to explain it but it will affect your pension, particularly if you get Tier 2 at some point.

Happy to chat offline if you want although I would strongly advise getting some proper financial advice.  I have found Wesleyan to be very knowledgeable.

N.