Salary Sacrifice after taking state pension

Dazed_and_C0nfused

crv1963 said:

NotTightJustCareful said:

Sarahspangles said:

NotTightJustCareful said:

Marcon said:

crv1963 said:

NotTightJustCareful said:

TheSpectator said:

As above you cannot salary sacrifice below minimum wage Is is really the end of the world if you pay £300 odd tax? Deferring state pension to save £300 seems a bit extreme. Makes sense to defer if you are higher rate.

   Fair point , I was wanting an extra reason to defer my state pension. I like the idea of small annuity to boost my basic pension to cover my basic needs. I have a small NHS DB pension that I have yet to take and that with the increased state pension would cover my basic needs. I will be drawing down my DC pension as I require extra to live upon.

Which NHS Scheme is this in? 1995 scheme has pensionable age 60 years old and 2008 scheme 65 years old. Deferring taking the NHS Scheme doesn't increase them it is simply money lost. I don't know how you define small but I suspect you have already lost more than you are trying to save? 

Indeed. OP, please have a look at https://forums.moneysavingexpert.com/discussion/6568035/nhs-1995-pension-doesnt-grow-after-60/p1

There's a danger you could be scrabbling for ways to save a few pounds in tax, but losing NHS pension payments (permanently) in the process, depending on which NHS scheme you are in.

I was in the 1995 scheme. I have a very small pension £550 per year. I assumed that it will grow by inflation until i take it probably at 67 when I actually retire.  You are not saying i will lose all the back years completed are you? I don't I want to take the accrued NHS pension (which works out at £4.5K with lump sum) this year as it will mean I will lose the starting rate for savers interest and I would have to pay £400 in tax on non ISA interest. When I am 67 I plan to have most of my savings in an ISA wrapper so the problem is adverted.

My understanding is that if this pension is ‘unlinked’ (no longer working in the NHS, or had a break of 5 years) you’ll get CPI increases only, you won’t receive more by deferring and you’ll lose the 7 years of pension payments.

The ‘Retire and Return’ rules for current NHS employees had to be introduced to allow people to claim their 1995 benefits and keep working past 60. 

So you saying I will lose all the pension owing to me because i didn't claim it when I was 60 ? Seems incredibly unfair and not what told to me when I inquired with the NHS pension office. I shall contact them to clarify again.

Yes you have lost £550 multiplied by however many years that you are over 60. There is no backdating. It will have increased by CPI only. Deferring does not increase the pension size.

Is there a (very) small consolation that the PCLS, which I'm assuming is still payable, will be based on the pension that is actually put into payment?

That might be say £650 due to choosing not to take it at NPA, (so PCLS £1,950) instead of £550 that would have been payable if it had commenced at age 60 (so PCLS would have been £1,650)?

Or is it even worse than that 😥

crv1963

crv1963 said:

NotTightJustCareful said:

Sarahspangles said:

NotTightJustCareful said:

Marcon said:

crv1963 said:

NotTightJustCareful said:

TheSpectator said:

As above you cannot salary sacrifice below minimum wage Is is really the end of the world if you pay £300 odd tax? Deferring state pension to save £300 seems a bit extreme. Makes sense to defer if you are higher rate.

   Fair point , I was wanting an extra reason to defer my state pension. I like the idea of small annuity to boost my basic pension to cover my basic needs. I have a small NHS DB pension that I have yet to take and that with the increased state pension would cover my basic needs. I will be drawing down my DC pension as I require extra to live upon.

Which NHS Scheme is this in? 1995 scheme has pensionable age 60 years old and 2008 scheme 65 years old. Deferring taking the NHS Scheme doesn't increase them it is simply money lost. I don't know how you define small but I suspect you have already lost more than you are trying to save? 

Indeed. OP, please have a look at https://forums.moneysavingexpert.com/discussion/6568035/nhs-1995-pension-doesnt-grow-after-60/p1

There's a danger you could be scrabbling for ways to save a few pounds in tax, but losing NHS pension payments (permanently) in the process, depending on which NHS scheme you are in.

I was in the 1995 scheme. I have a very small pension £550 per year. I assumed that it will grow by inflation until i take it probably at 67 when I actually retire.  You are not saying i will lose all the back years completed are you? I don't I want to take the accrued NHS pension (which works out at £4.5K with lump sum) this year as it will mean I will lose the starting rate for savers interest and I would have to pay £400 in tax on non ISA interest. When I am 67 I plan to have most of my savings in an ISA wrapper so the problem is adverted.

My understanding is that if this pension is ‘unlinked’ (no longer working in the NHS, or had a break of 5 years) you’ll get CPI increases only, you won’t receive more by deferring and you’ll lose the 7 years of pension payments.

The ‘Retire and Return’ rules for current NHS employees had to be introduced to allow people to claim their 1995 benefits and keep working past 60. 

So you saying I will lose all the pension owing to me because i didn't claim it when I was 60 ? Seems incredibly unfair and not what told to me when I inquired with the NHS pension office. I shall contact them to clarify again.

Yes you have lost £550 multiplied by however many years that you are over 60. There is no backdating. It will have increased by CPI only. Deferring does not increase the pension size.

No either take it or lose it, no back payment with the 1995 scheme!

NotTightJustCareful

I have contacted the NHS Pension Service about backdating of my pension. They response appears to contradict what crv1963 is saying but it applies to my circumstance.
This is what the NHS Pension Administrator replied :

If you’ve not worked in the NHS since your NPA, your pension will be backdated to your NPA. You’ll receive a mandatory taxable back payment of your pension benefits. You cannot choose the date your back payment of benefits will be paid into your account. (My circumstance)

If you’re an active member of the NHS Pension Scheme, your benefits will only become payable when you leave NHS employment. There is no backdating of pension to your NPA.

If you opted out of the 1995 or 2008 Section of the NHS Pension Scheme but continued to work in the NHS until after your NPA, your pension benefits from that Section of the Scheme can only be paid from when you leave NHS employment or if it's been 5 years since the date you last paid in. You’ll not be entitled to have your pension backdated unless you’ve opted out for a period of 5 years after your NPA. 

It makes sense for me to take my NHS pension backdated to 60 ,when I fully retire and have the state pension as my only other monthly income.

crv1963

NotTightJustCareful, if this is indeed the case I am pleased for you. 

NotTightJustCareful

https://forums.moneysavingexpert.com/discussion/comment/81118415#Comment_81118415

I got the backdated pension from the NHS as i expected.