Help me understand my wife's NHS pension please

arthur_fowler

Hi,
My wife is currently working for NHS and plans to retire next year at age 59.
She has some benefits in 1995 section. Key figures:
Normal pension age: 60 years
Updated to: 31/03/2015
Pension: £3,153
Lump Sum: £9,459

2015 section:
Normal pension age: 65
Updated to: 21/10/2021
Pension: £2,215
Lump Sum: £0
Pensionable earnings statement:

Year End	Pensionable Earnings	Pension Earned	Revaluation
2016	£15,737.84	£291.44	1.4
2017	£14,953.42	£276.92	2.5
2018	£14,882.98	£275.61	4.5
2019	£15,469.50	£286.47	3.9
2020	£16,297.68	£301.81	3.2
2021	£16,428.20	£304.23	2
2022	£10,693.09	£198.02	4.6

There are other figures in mynhspension, but I think these are the important ones.

I have a few questions:
1) The "Pension" in both sections. If she retires before reaching normal pension age, is this the figure she will get? Or will it go up by CPI or will it be less than that as she hasn't continued contributing until normal pension age?

2) Why would the "Updated to" date be nearly 3 years ago on the 2015 section?

3) On the Pensionable earnings statement it is only updated to 2022. Is that right if she is still working and contributing?
Thanks!

Dazed_and_C0nfused

arthur_fowler said:

Hi,
My wife is currently working for NHS and plans to retire next year at age 59.
She has some benefits in 1995 section. Key figures:
Normal pension age: 60 years
Updated to: 31/03/2015
Pension: £3,153
Lump Sum: £9,459

2015 section:
Normal pension age: 65
Updated to: 21/10/2021
Pension: £2,215
Lump Sum: £0
Pensionable earnings statement:

Year End	Pensionable Earnings	Pension Earned	Revaluation
2016	£15,737.84	£291.44	1.4
2017	£14,953.42	£276.92	2.5
2018	£14,882.98	£275.61	4.5
2019	£15,469.50	£286.47	3.9
2020	£16,297.68	£301.81	3.2
2021	£16,428.20	£304.23	2
2022	£10,693.09	£198.02	4.6

There are other figures in mynhspension, but I think these are the important ones.

I have a few questions:
1) The "Pension" in both sections. If she retires before reaching normal pension age, is this the figure she will get? Or will it go up by CPI or will it be less than that as she hasn't continued contributing until normal pension age?

2) Why would the "Updated to" date be nearly 3 years ago on the 2015 section?

3) On the Pensionable earnings statement it is only updated to 2022. Is that right if she is still working and contributing?
Thanks!

1.  No, it will be either be reduced, if she makes a choice to take it early, or increased to reflect annual inflation proofing.  With the NHS in service revaluation for the 2015 scheme has an extra 1.5% added so she would get a slightly reduced increase if she is a deferred member.  For example the 2022 figure would have been 3.1% rather than 4.6%.

2.  No idea

3.  No, I would have expected that to be 2023.  And then in August(?) this year it be updated to include 2024.

kaMelo

1.
For the 1995 scheme, the figures shown are not guaranteed, the amount quoted is based upon the data they currently hold. Her actual  pension entitlement will be calculated on her last day of employment taking the best of her last three years salary (uprated to full time equivalent if part time) divided by 80, then multiplied by however many years she has accrued.
The last three years pensionable pay is worked out by counting back 365 days from the day of retirement to work out her last years pensionable earnings, then another 365 for the second to last year, then another 365 days for the third to last year (If you know what I mean.  This can make a difference when choosing the date of retirement.

If taken at 59 both pension schemes will be actuarially reduced.
https://cms.nhsbsa.nhs.uk/sites/default/files/2023-09/Early Retirement factsheet-20230911-(V6) .pdf


2 & 3
Again I've no idea why, like @Dazed_and_C0nfused I'd have expected the data to include 2023 and be updated with 2024 data around August/September.
The only thing I can think of is does she work in an NHS setting like a hospital or somewhere like a GP practice. I seem to remember reading practitioners information on TRS being twelve months behind officers, but this is a bit of a guess if I'm being honest.

arthur_fowler

Thanks both. Very helpful. 

Although she will retire next year she will take her pension at the respective normal retirement date (60 and 65 respectfully) so should be no actuarial adjustment. 

Yes, she works at a GP practice. 

Marcon

Here's what the scheme says she should(!) expect:

https://www.nhsbsa.nhs.uk/employee-section/how-your-statement-updated

Moonwolf

For what it is worth.

The revaluation for 2023 is 11.6 and the revaluation for 2024 is 8.2.  The 11.6 means in particular that her final 2105 pension will be noticeably higher.

If for example her pensionable earnings stayed at £10.693.09 in 2023 and 2024 and she was retiring April just gone, I make it her 2015 pension would be £3,137.29 per year.  That increase slows down a little when she stops working because the extra 1.5% no longer applies.

Moonwolf

These are my calculations in case I have made an error.

Year End	Pensionable Earnings	Pension Earned	Revaluation	Pension
2016	£15,737.84	£291.44	1.4	£291.44
2017	£14,953.42	£276.92	2.5	£572.44
2018	£14,882.98	£275.61	4.5	£862.36
2019	£15,469.50	£286.47	3.9	£1,187.64
2020	£16,297.68	£301.81	3.2	£1,535.76
2021	£16,428.20	£304.23	2	£1,889.13
2022	£10,693.09	£198.02	4.6	£2,124.94
2023	£10,693.09	£198.02	11.6	£2,420.70
2024	£10,693.09	£198.02	8.2	£2,899.53
				£3,137.29

arthur_fowler

Moonwolf said:

These are my calculations in case I have made an error.

Year End	Pensionable Earnings	Pension Earned	Revaluation	Pension
2016	£15,737.84	£291.44	1.4	£291.44
2017	£14,953.42	£276.92	2.5	£572.44
2018	£14,882.98	£275.61	4.5	£862.36
2019	£15,469.50	£286.47	3.9	£1,187.64
2020	£16,297.68	£301.81	3.2	£1,535.76
2021	£16,428.20	£304.23	2	£1,889.13
2022	£10,693.09	£198.02	4.6	£2,124.94
2023	£10,693.09	£198.02	11.6	£2,420.70
2024	£10,693.09	£198.02	8.2	£2,899.53
				£3,137.29

I can't make the maths work. Is the revaluation applied to that year or the next? 

i.e. is the 1.4 revaluation for 2016 applied to £291.44 or £276.92 either way I can't reach your numbers.

Thanks for your help

Purplelady65

Although she will retire next year she will take her pension at the respective normal retirement date (60 and 65 respectfully) so should be no actuarial adjustment. 

Re the NHS 2015 scheme the retirement age is linked to State Pension Age which for your wife will not be age 65. It will be either 66 or 67 so if you draw it at 65 there will be a reduction. 

arthur_fowler

Purplelady65 said:

Although she will retire next year she will take her pension at the respective normal retirement date (60 and 65 respectfully) so should be no actuarial adjustment. 

Re the NHS 2015 scheme the retirement age is linked to State Pension Age which for your wife will not be age 65. It will be either 66 or 67 so if you draw it at 65 there will be a reduction. 

Oh, thanks for that! Yes 67. Won't take the reduction, will need to plan to bridge that gap.

saucer

Bear in mind that the reduction is meant to be cost neutral because the pension will be paid for longer.