NHS PENSIONS

Hoenir

FHMS said:

Private pensions are not very good and should be improved. 

Perhaps public sector workers should pay more tax to help fund them.  

Universidad

FHMS said:

I am not responsible for the bitterness some of you seem to hold towards NHS staff.

Every time you identify as NHS staff and then post an opinion, you're taking some responsibility for how others see NHS staff.

Silvertabby

No bitterness towards NHS staff.  Just surprise that, out of all the public sector pension fund members, it seems to be NHS bods who have the most trouble in understanding and appreciating  their extremely generous pension scheme.

We are here to help and explain, not judge.  And many of us are also public sector pensioners, of various flavours, so we are certainly not begrudging you your pension.

DoublePolaroid

Having worked in psychiatry you ought to know better than to use the loaded term “gaslighting” in the OP, particularly when the post demonstrates that you fundamentally misunderstood the subject of the NHS pension scheme on which you were opining. In that context using the term could be considered ironic. 

I am currently contributing to the 2015 NHS pension scheme and whilst no expert on the subject I know more than the average scheme member and I consider myself extremely fortunate that I am in all likelihood going to be able to retire more than 10 years before SPA in large part due to the generosity of the scheme. 

That I’ll have to pay a reasonably hefty chunk in tax on my retirement income is one of the more first-worldly of first world problems. 

[Deleted User]

FHMS said:

Hi,
I receive both state and NHS pensions. As the NHS pension is classed as ‘contracted out’ my state pension is reduced and I currently receive £8160 per annum. This amount is then deducted from my tax allowance  so that my allowance for 2024/25 is now only £2980 per annum. In effect I am taxed on my state pension. When I relate this to my friends they are amazed. I think that most people have been subjected to the golden NHS pension myth and thought it would be useful remove the gaslighting from the subject.

Did you investigate whether or not voluntary NI contributions may have or could increase your state pension entitlement? I will pay Year 47 top up as soon as know what I owe for 2023/2024 is calculated ( I worked for 3 months last tax year). This will bring me up to almost the ‘new’ state pension which for me starts in July. Considering I was contracted out for so many years I am very content with this outcome.

No moans from me paying tax on my total pension income (probably about £4000 a year when state pension kicks in.) I realise I am very fortunate to have my teacher ‘s pension and forthcoming state pension. I also like the idea that I am still contributing via tax to the services we all need in our daily lives.

You need to be grateful for your pension provision. Of course you worked hard but,so have millions of others.

dunstonh

Private pensions are not very good and should be improved.

What do you mean by private pension?  (its a phrase that people use to mean different things.  e.g. anything that is not state.   Or anything that is not state or company provided).

The NHS pension is very good.   Too good in reality, along with most of the public sector pensions.   It made sense years ago when public sector pay was lower than private sector and was seen as a way to reward a career in public service.  However, now that the differential between public sector and private sector pay no longer exists, it is now a very very generous pension.

Lastly I worked for 38 years in acute psychiatry and earned every penny of my pension. I was not “extraordinarily fortunate” to receive a reasonable pension nor is anyone who works in the NHS.

Again, you just highlight how clueless many people are about the NHS pension.

Are you suggesting that other people do not work hard for their pension entitlements? 
The majority of those people will have access to pensions of a far lower quality than you have.

Moonwolf

dunstonh said:

However, now that the differential between public sector and private sector pay no longer exists, it is now a very very generous pension.

I'm not convinced this is always true.  After TUPE, being on protected salary for a few years a re-organisation gave me the choice between a 20% pay cut compared to what I was earning in the private sector or redundancy.  The reasons I haven't gone back to the private sector were COVID uncertainty,  because I'm so close to retirement and I had 6 weeks off sick due to cancer surgery and didn't want to be in a new post if it comes back.  I didn't take redundancy as it was a couple of years too early on the numbers.

dunstonh

Moonwolf said:

dunstonh said:

However, now that the differential between public sector and private sector pay no longer exists, it is now a very very generous pension.

I'm not convinced this is always true.  After TUPE, being on protected salary for a few years a re-organisation gave me the choice between a 20% pay cut compared to what I was earning in the private sector or redundancy.  The reasons I haven't gone back to the private sector were COVID uncertainty,  because I'm so close to retirement and I had 6 weeks off sick due to cancer surgery and didn't want to be in a new post if it comes back.  I didn't take redundancy as it was a couple of years too early on the numbers.

There are always going to be exceptions to the rule as some jobs cannot be replicated in the public sector whilst others can.  Some of those that can could pay more but some could pay less.     But in general, historically, the public sector paid less but had a better pension but in the last two decades it was the other way around.

The IFS indicate that from 2001 to 2021, the public sector was earning more than the private sector when looking at real average annual earnings per employee in the public sector vs the private sector.   However, from Jan 2022 they equalised and since then public sector fell below the private for the first time in that period and has remained below.

The drop in public sector pay since Jan 22, according to the IFS, has been mainly on the back of higher-skilled roles (Teachers, doctors and nurses) and not in unskilled or management (or unskilled management!) who have largely got away with it.

Moonwolf

dunstonh said:

There are always going to be exceptions to the rule as some jobs cannot be replicated in the public sector whilst others can.  Some of those that can could pay more but some could pay less.     But in general, historically, the public sector paid less but had a better pension but in the last two decades it was the other way around.

The IFS indicate that from 2001 to 2021, the public sector was earning more than the private sector when looking at real average annual earnings per employee in the public sector vs the private sector.   However, from Jan 2022 they equalised and since then public sector fell below the private for the first time in that period and has remained below.

The drop in public sector pay since Jan 22, according to the IFS, has been mainly on the back of higher-skilled roles (Teachers, doctors and nurses) and not in unskilled or management (or unskilled management!) who have largely got away with it.

Although wasn't the the IFS reporting mean earnings per worker so isn't making any allowance for skill mix or educational level? I have no idea how the mix of doctors and nurses and other degree level roles compares with the general work force. 

I'm pretty convinced that IT always has been paid worse.  An unpopular opinion, but I think very senior management is paid worse, the group that in the private sector earns £500,000 plus - both John Harvey-Jones and Gerry Robinson said that when they made TV programs about "fixing" NHS management.  Some specialist scientific roles such as pathology are routinely poorly paid for degree level jobs and do/should consultant salaries equate with lawyers?

And of course the IFS acknowledges that in real terms public sector pay is lower than 2007 while private sector pay increased by 4% so irrespective of the differential, NHS employees will feel worse paid.

However, having paid 20% of my salary into my pension in the private sector with my employer matching 9% and seeing what that gets me compared to 15.3% (12.5% + 2.8% ERRBO) of my salary now, 14.0% from this year I think - I absolutely agree the NHS pension is brilliant.  Also when I hear colleagues say that the 2015 scheme isn't worth having I find it difficult to comprehend how poorly they understand the world outside the NHS.

Universidad

dunstonh said:

now that the differential between public sector and private sector pay no longer exists,

I've never been convinced by this argument, even though it's not made without some supporting data.

But between 2008 and 2024, can you give me an example of a single public sector pay agreement that has been above inflation? There's an argument that parity was reached between public and private sector in the early 2000s, but nobody ever seems to be able to account for the fact that real terms wages are down 20-30% in the public sector over the last 15 years. 

One might claim that private sector wages are down in real terms, too (and recent reporting seems to support that to an extent) but that opinion has never been popular on this board. Plus nearly half of the triple lock state pension raises since 2016 have been based on earnings rather than inflation. In how many years did the public sector get a rise in line with inflation, let alone earnings?

I suspect what's the case is that there are more absolute bottom tier minimum wage jobs in the private sector. It's the skilled roles where the salaries are likely to be higher. And there is certainly a greater pay range for similar jobs in the private sector. 

My own job in the University sector when I left was worth about 50K at the top. When I left they downgraded it to 35K, but could not recruit. In the public sector I'm now on 55K, but I've never seen this role advertised for more, and I have seen the role advertised for less. 

In the private sector as a whole, I've seen a range between 35K and 145K for the same job. At 35K the employers are, frankly, chancers - and there are definitely more of those in the private sector.

But among my immediate peer group from University I was the only public sector employee and by far the lowest earner for the first 20 years of my career. I took solace in the pension, until I started looking into what it was actually worth, and realised the DC pensions (let alone stock options!) of my peers had them well ahead on that front, too.