NHS pension - Continue with AVCs or Prudential or SIPP?

nick5990

Currently I have a Band 5 salary, NHS Pension, and have been in the 2015 section of the NHS pension scheme since 2020. I started paying around £110 AVCs per month into the NHS pension early 2021. I understand that the pension (excl AVCs) accrues at 1/54th of annual pre-tax salary, which say is £600 per year for simplicity. 

In addition I have 3 SIPPs. HL balance £14k (balance charges 0.45%), AJ Bell balance £4k (balance charges 0.25%), and Vanguard around £200 (balance charges 0.15%). Percentage charges from memory. I contribute regular amounts into these 3 SIPPs post tax - estimated around £300 and some of that £300 will be from savings.

I am asking whether paying AVCs straight into my NHS Pension is a good thing, or whether another SIPP pot / service (eg Prudential do a pension I understand discounted by NHS) would be a better use of the money? 

QrizB

Not answering your question, but why three SIPPs? You're paying £63 a year in charges to HL, for example, but could have the £14k in Vanguard and save £42?

saucer

As above, no real advantage to having 3 SIPPs.
Regarding the NHS pension the 2015 scheme is good and as you say is based on effectively bagging a proportion of your salary for your retirement for each year you work. Unlike a SIPP or AVC it doesn’t depend on investments and is rock solid dependable, albeit will be reduced if you take it early. 

I am NHS and I never saw the AVCs as attractive. They have the disadvantages of being more risky than the rest of the pension, and may have higher charges than the SIPP. Have you looked at NHS Additional Pension which would buy you more guaranteed income in retirement? https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension

Albermarle

Prudential have a pretty poor reputation for customer service, website functionality etc,  and in my opinion would be a second choice behind one of the SIPP providers mentioned, 

Bobinyorkshire

My plan was to use a SIPP to bridge to 60 for the 1995. If I remember correctly I chose this as the AVC or ERBO could not be used before 60

cloud_dog

nick5990 said:

I am asking whether paying AVCs straight into my NHS Pension is a good thing, or whether another SIPP pot / service (eg Prudential do a pension I understand discounted by NHS) would be a better use of the money? 

I struggle to say the word 'Pruden...' without gagging.  I used to have my AVCs (different DB scheme) with Pruden...; nightmare.  I'm sure one day they may get back on an even keel, but their struggles have been going on for almost 4 years now (IT system replacement, Covid and insufficient / knowledgeable people).

Moonwolf

As others have said, do you need three SIPPs?

This was my personal non expert analysis of the NHS additional pension options when I looked at it. 
https://forums.moneysavingexpert.com/discussion/comment/78669411#Comment_78669411

I went with ERRBO and paying into an existing pension.

nick5990

QrizB said:

Not answering your question, but why three SIPPs? You're paying £63 a year in charges to HL, for example, but could have the £14k in Vanguard and save £42?

Good point. I'm planning on sticking with HL until some of my paper losses come back. I realise this may be eg 5 years & the associated charges. If they don't recover within 5 years, I plan to sell all and transfer to AJ Bell / Vanguard.

nick5990

saucer said:

As above, no real advantage to having 3 SIPPs.
Regarding the NHS pension the 2015 scheme is good and as you say is based on effectively bagging a proportion of your salary for your retirement for each year you work. Unlike a SIPP or AVC it doesn’t depend on investments and is rock solid dependable, albeit will be reduced if you take it early. 

I am NHS and I never saw the AVCs as attractive. They have the disadvantages of being more risky than the rest of the pension, and may have higher charges than the SIPP. Have you looked at NHS Additional Pension which would buy you more guaranteed income in retirement? https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension

Its not clear to me from the document linked how Additional Pension works compared to the AVCs I currently pay?
Also what one expects to receive for the Additional Pension vs AVCs come retiring?
Would appreciate an explanation please