Is it worth me contributing to another pension for 20 years? NHS

GunJack

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

100% yes. At your age it is difficult to reconcile with being your future self but not only is it tax efficient, you'll get employer contributions and it will build nicely.

It doesn't work like that, the NHS is a DB CARE pension, you were implying a DC scheme.

Even better. The employer will be contributing even more. The employer contributions into mine worked out around 49%. You'd have to be crazy not to join an active DB scheme, although too late for me to change careers. Looks like (with reduction factors) you can access it from 55 too. I'd definitely be filling the application form in.

As it's a DB scheme, what the employer puts in is totally irrelevant - your contribution is more like a membership fee which gives you entitlement to a pension based on the scheme rules, not building up a "pot".

Employer contributions are even less relevant as you couldn't transfer it out to a DC anyway...

LHW99

20 years of a DB pension is very much worth having. It will have annual increases of some type, and gives you a good base when added to the SP.

It means any additional SIPP / AVC (or ISA) savings you can make over the years will give you flexibility in when you want to retire, as said above, or would allow an extra annual cruise, more travelling, more options for visiting the theatre, taking up new hobbies.... whatever you enjoy

Cobbler_tone

GunJack said:

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

100% yes. At your age it is difficult to reconcile with being your future self but not only is it tax efficient, you'll get employer contributions and it will build nicely.

It doesn't work like that, the NHS is a DB CARE pension, you were implying a DC scheme.

Even better. The employer will be contributing even more. The employer contributions into mine worked out around 49%. You'd have to be crazy not to join an active DB scheme, although too late for me to change careers. Looks like (with reduction factors) you can access it from 55 too. I'd definitely be filling the application form in.

As it's a DB scheme, what the employer puts in is totally irrelevant - your contribution is more like a membership fee which gives you entitlement to a pension based on the scheme rules, not building up a "pot".

Employer contributions are even less relevant as you couldn't transfer it out to a DC anyway...

I know how both pensions work. The point was why wouldn’t you join a DB where the employer contributions far outweigh a DC…unless of course they under fund it, which now has protection. 

I did the calculation of when my DB closed and a new DC opened. Between the ages of 52 (when it closed) and 65 it was £300k light in equivalent terms. I was glad to get over 25 years into it and it closed to new members many years before.

Dazed_and_C0nfused

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

100% yes. At your age it is difficult to reconcile with being your future self but not only is it tax efficient, you'll get employer contributions and it will build nicely.

It doesn't work like that, the NHS is a DB CARE pension, you were implying a DC scheme.

Even better. The employer will be contributing even more. The employer contributions into mine worked out around 49%. You'd have to be crazy not to join an active DB scheme, although too late for me to change careers. Looks like (with reduction factors) you can access it from 55 too. I'd definitely be filling the application form in.

As it's a DB scheme, what the employer puts in is totally irrelevant - your contribution is more like a membership fee which gives you entitlement to a pension based on the scheme rules, not building up a "pot".

Employer contributions are even less relevant as you couldn't transfer it out to a DC anyway...

I know how both pensions work. The point was why wouldn’t you join a DB where the employer contributions far outweigh a DC…unless of course they under fund it, which now has protection. 

I did the calculation of when my DB closed and a new DC opened. Between the ages of 52 (when it closed) and 65 it was £300k light in equivalent terms. I was glad to get over 25 years into it and it closed to new members many years before.

I honestly don't think that when it comes to public sector DB pensions, like the NHS 2015 scheme, many people have the slightest interest in what the employer contribution is.

For those who take more of an interest in their pensions the accrual rate, revaluation factor and any survivor benefits will be of far more interest.  And possibly the employee contribution rate.

Cobbler_tone

Dazed_and_C0nfused said:

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

GunJack said:

Cobbler_tone said:

100% yes. At your age it is difficult to reconcile with being your future self but not only is it tax efficient, you'll get employer contributions and it will build nicely.

It doesn't work like that, the NHS is a DB CARE pension, you were implying a DC scheme.

Even better. The employer will be contributing even more. The employer contributions into mine worked out around 49%. You'd have to be crazy not to join an active DB scheme, although too late for me to change careers. Looks like (with reduction factors) you can access it from 55 too. I'd definitely be filling the application form in.

As it's a DB scheme, what the employer puts in is totally irrelevant - your contribution is more like a membership fee which gives you entitlement to a pension based on the scheme rules, not building up a "pot".

Employer contributions are even less relevant as you couldn't transfer it out to a DC anyway...

I know how both pensions work. The point was why wouldn’t you join a DB where the employer contributions far outweigh a DC…unless of course they under fund it, which now has protection. 

I did the calculation of when my DB closed and a new DC opened. Between the ages of 52 (when it closed) and 65 it was £300k light in equivalent terms. I was glad to get over 25 years into it and it closed to new members many years before.

I honestly don't think that when it comes to public sector DB pensions, like the NHS 2015 scheme, many people have the slightest interest in what the employer contribution is.

For those who take more of an interest in their pensions the accrual rate, revaluation factor and any survivor benefits will be of far more interest.  And possibly the employee contribution rate.

Ok. At least they should be interested in what they pay in vs what they get out.
I have 30 years service and amount of people who chose not to join our DB scheme when it was open to (to 2010) is frankly staggering. Most now pay their 6% into our DC scheme to get a 12% match. 

Just pointing out that unless anyone shows me otherwise a DB scheme usually trumps a DC scheme.

Albermarle

OP,
This might help to understand some of the points discussed.

The main NHS scheme is a DB ( Defined Benefit) pension, similar to other is the public sector and one of the advantages of being in public sector employment.
Defined benefit: final salary pension schemes explained | MoneyHelper

The other type of pension is a DC( Defined Contribution ) pension.
Workplace pensions ( other than DB schemes) AVC's; SIPPs, personal pensions etc are all DC schemes.
Defined Contribution Pension schemes | MoneyHelper

The two types ( DC and DB) are totally different, so it is important that you understand the difference.