NHS Pension

ButterCheese

Hi all, sorry I am totally clueless about my NHS pension.  I'd like to try and plan ahead a bit in my life but have no clue what to expect.

I started working for the NHS in Jan 2009 and my TRS (2008 section) says I have 13 years reckonable membership.  The 2015 scheme says I joined the scheme on 1st April 2022.  I understand the normal pensionable age is 68 years - so is it true that I cannot retire from the NHS before I'm 68, otherwise I won't get any NHS pension?

Secondly, if I do continue working until I'm 68 - that would be 39 years in total that I have worked.  It says my pension earned is £640/year.  So (roughly) £640 x 39 = £25k.  How is that £25k paid?  Would it be monthly (e.g. £2083/month)?  That seems very high to me.  I am top of band 5 and do not expect to go up any bands for the rest of my life i.e. my current salary will be what I retire on.

I'm asking because I stand to inherit half of my parents estate in 20 odd years time.  Not to be crude but I'm sure we won't be short of a bob by that time, when we probably wouldn't need to rely on my NHS pension.  I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension?

Marcon

ButterCheese said:

Hi all, sorry I am totally clueless about my NHS pension.  I'd like to try and plan ahead a bit in my life but have no clue what to expect.

I started working for the NHS in Jan 2009 and my TRS (2008 section) says I have 13 years reckonable membership.  The 2015 scheme says I joined the scheme on 1st April 2022.  I understand the normal pensionable age is 68 years - so is it true that I cannot retire from the NHS before I'm 68, otherwise I won't get any NHS pension? - NO

Secondly, if I do continue working until I'm 68 - that would be 39 years in total that I have worked.  It says my pension earned is £640/year.  So (roughly) £640 x 39 = £25k.  How is that £25k paid?  Would it be monthly (e.g. £2083/month)?  That seems very high to me.  I am top of band 5 and do not expect to go up any bands for the rest of my life i.e. my current salary will be what I retire on. MONTHLY PENSION, WITH OPTION TO TAKE A LOWER ANNUAL PENSION + A ONE-OFF TAX FREE LUMP SUM

I'm asking because I stand to inherit half of my parents estate in 20 odd years time.  Not to be crude but I'm sure we won't be short of a bob by that time, when we probably wouldn't need to rely on my NHS pension.  I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension? OPTING OUT WOULD BE FOOLISH...

Have a look at the member section of the website: https://www.nhsbsa.nhs.uk/member-hub

(forgive the capitals - I'm not shouting, just making my answers easier to spot!)

Dazed_and_C0nfused

Marcon said:

ButterCheese said:

Hi all, sorry I am totally clueless about my NHS pension.  I'd like to try and plan ahead a bit in my life but have no clue what to expect.

I started working for the NHS in Jan 2009 and my TRS (2008 section) says I have 13 years reckonable membership.  The 2015 scheme says I joined the scheme on 1st April 2022.  I understand the normal pensionable age is 68 years - so is it true that I cannot retire from the NHS before I'm 68, otherwise I won't get any NHS pension? - NO

Secondly, if I do continue working until I'm 68 - that would be 39 years in total that I have worked.  It says my pension earned is £640/year.  So (roughly) £640 x 39 = £25k.  How is that £25k paid?  Would it be monthly (e.g. £2083/month)?  That seems very high to me.  I am top of band 5 and do not expect to go up any bands for the rest of my life i.e. my current salary will be what I retire on. MONTHLY PENSION, WITH OPTION TO TAKE A LOWER ANNUAL PENSION + A ONE-OFF TAX FREE LUMP SUM

I'm asking because I stand to inherit half of my parents estate in 20 odd years time.  Not to be crude but I'm sure we won't be short of a bob by that time, when we probably wouldn't need to rely on my NHS pension.  I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension? OPTING OUT WOULD BE FOOLISH...

Have a look at the member section of the website: https://www.nhsbsa.nhs.uk/member-hub

(forgive the capitals - I'm not shouting, just making my answers easier to spot!)

But everyone reading is shouting the last one (at the op!)

Sarahspangles

ButterCheese said:

I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension?

Others have commented on the financial benefits of continuing to contribute.

When you’re considering options for supporting family, it’s worth contacting HR to understand your options. They won’t do the sums for you, other than in a headline way, but the Trusts I’ve worked with are keen to make it easier for staff to continue part time or to ‘ease into’ retirement rather than losing their experience and capacity.

LightFlare

Generally - you get a reduction in your pension if you take it before the pensionable age.

I would suggest you DON'T rely on any possible/future inheritance -- it might all need to be spent of a care home for example and you get nothing

the NHS pension also has a good survivor clause

Whilst the pension is still very good - I would suggest its far from the "gold plated" that you hear about -- in fact - anyone who makes it to 67 and has full contributions should get a medal as well !!

as a start point on the 2015 system - you will accrue 1/54th of you annual pay per year that you contribute. (I dont recall what the 2008 was)

You will then get the option to sacrifice some of your annual pension to produce a lump sum

this is  for the 2015 section:

itsthelittlethings

It's relatively common in the NHS for people to retire early,  the earliest you can go is 55.

Sarahspangles

LightFlare said:

Generally - you get a reduction in your pension if you take it before the pensionable age.

as a start point on the 2015 system - you will accrue 1/54th of you annual pay per year that you contribute. (I dont recall what the 2008 was)

You will then get the option to sacrifice some of your annual pension to produce a lump sum

this is  for the 2015 section:

Although it’s called a reduction it’s a lower payment in reflection of the time the pension is being paid out for longer. Sometimes there is a perception that it’s ‘punitive’ but I don’t think it is in this case. 

ButterCheese

Sarahspangles said:

ButterCheese said:

I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension?

Others have commented on the financial benefits of continuing to contribute.

When you’re considering options for supporting family, it’s worth contacting HR to understand your options. They won’t do the sums for you, other than in a headline way, but the Trusts I’ve worked with are keen to make it easier for staff to continue part time or to ‘ease into’ retirement rather than losing their experience and capacity.

Thanks for the tip.  I did contact the pensions advisor at my Trust to explain it, but they were less than helpful.  In fact, they said they were unable to give me any information and I had to contact the "national pensions people".  Thanks to someone providing the link above, I have now contacted them.

crv1963

ButterCheese said:

Hi all, sorry I am totally clueless about my NHS pension.  I'd like to try and plan ahead a bit in my life but have no clue what to expect.

I started working for the NHS in Jan 2009 and my TRS (2008 section) says I have 13 years reckonable membership.  The 2015 scheme says I joined the scheme on 1st April 2022.  I understand the normal pensionable age is 68 years - so is it true that I cannot retire from the NHS before I'm 68, otherwise I won't get any NHS pension? 2008 scheme you accrued 1/60th for each year worked so have already saved a pension of nearly a quarter of your salary. This can be taken at age 60years old as that is this scheme's retirement age. Everyone in the NHS was moved to the 2015 in April 2022 as the other schemes were closed to new contributions, but the benefits people have were not closed.

Secondly, if I do continue working until I'm 68 - that would be 39 years in total that I have worked.  It says my pension earned is £640/year.  So (roughly) £640 x 39 = £25k.  How is that £25k paid?  Would it be monthly (e.g. £2083/month)?  That seems very high to me.  I am top of band 5 and do not expect to go up any bands for the rest of my life i.e. my current salary will be what I retire on. You need to think of the pension as deferred income, you get a bit less now for a bit more later. You if you don't retire early but work to 68 would have 13/60ths + 26/54 ths which of the top of my head is just under 75% of your current salary, as a pension, there is an option to reduce the monthly income for a tax free lump sum. Top Band 5 is good, there are always changes and reorganisations in the NHS, so you may not move upwards but can always move sideways!

I'm asking because I stand to inherit half of my parents estate in 20 odd years time.  Not to be crude but I'm sure we won't be short of a bob by that time, when we probably wouldn't need to rely on my NHS pension.  I also want to be there to look after my aged parents which I couldn't do if I have to stay full time working until 68.  I guess I'm asking if it's worth not paying into it anymore (would I get anything back of the £11k that the TRS says is the current value of my pension? Your NHS Pension plus State Pension puts you in a good place for retirement. Never expect an inheritance, lots can happen, your parents could live to be 100years old, care home fees, paid care at home, so nothing is a given with inheritance. It is well worth paying the pension deductions- you also have life benefit of your spouse/ nominated person getting a lump sum of twice your annual salary if you die while employed by the NHS, and good sick pay rates. If you stop paying in now the £11k pension becomes deferred and stays there until your State Pension Age you can't claim any of it back before then.

Under current rules you can take the 2008 pension when you hit 60 years old and continue to be employed full time in the NHS and continue paying into the 2015 scheme. Don't "take a break" from paying into the pension otherwise it can be difficult to get used to paying it once again if you re-join. 

GrubbyGirl_2

You cannot assume you are going to get a big inheritance when your parents are no longer with you.  Firstly there is inheritance tax which is 40% on anything over £500k if left to children and I would not be surprised if that changes in the budget.  Also you can't guarantee that the lot won't be taken in care costs any way and don't say it won't because my friend (as power of attorney for her 105 year old mother) has now exhausted all of her money.

As others have said you can take  your pension from the age of 55 with a reduction.  In 26 years time you cannot even guarantee that the state pension will be the same as it is now.  All of your thinking is based on assumption and things you cannot control.  Please don't stop paying into your pension it will be the worst days work you ever did and I say that as an NHS pensioner.

infj

Does your NHS employer offer any financial webinars about your pension? It's definitely worth attending one if they do - they will explain a lot and you can ask questions. My employer does this and I attended one which although I'm pretty savvy on these things, I did still find useful. It will be an external company and they will use it to promote their "wealth management" options (eyeroll) but you can safely ignore that and just use the free knowledge about pensions that your employer is providing.

One of the few good things that has come out of the last government and the pandemic is that desperation to keep staff led them to make big changes to the flexibility of the NHS Pension - you now have many more options than were possible even 2 years ago. Have a look at YouTube too - there are webinars about NHS pensions on there including NHS Pensions themselves www.youtube.com/@NHS_Pensions - but be wary of anything more that 12 months old - all the changes mean they will be mostly wrong.

And to add to the chorus of the other posters - DO NOT EVEN THINK ABOUT STOPPING YOUR CONTRIBUTIONS!