Cash pension in?

V3cash

So i have a very small pension pot of around £20,000 from a private pension which matures this April, i can extend it if wanted.
i am 55, years ago I had aspirations of retiring early 😜
i also will have a smallish nhs pension (will have been in nhs for 25yrs so not too long)
and we have a large 5 bedroom house we will sell and downsize, I’m
aware this wont leave loads as bungalows are not too much cheaper.
we may get a small inheritance in the near future but I’m not relying on that.
I’m currently overpaying mortgage and hoping to clear it in 5 years.
i want to retire at 65.
my question is, is it worth extending this small pension and paying a bit more into it or should i just take the pension lump sum and small annuity and save it?
not sure 5 years is enough to make much real difference as we hoping to take it at 60 as 
my 2015 part of nhs pension is taken at 60 meaning i can go part time at that point.

Dazed_and_C0nfused

Pensions don't usually "mature". 

55 tends to simply be the date you can take money out of you wanted to.

The NHS pension scheme is in "gold plated" territory when it comes to pensions so 25 years in that is something some people can only dream of.  Do you understand how the NHS scheme works?

You have loads of options with the small pension pot, you could review where your money is invested, add to it, move to a different provider (charges are an important element of pensions) or simply leave it where it is and use it later in life. 

Taking money out at 55 is not really what it was intended for, are you desperate for the money?  Have you considered the tax consequences?

Marcon

V3cash said:

So i have a very small pension pot of around £20,000 from a private pension which matures this April, i can extend it if wanted.
i am 55, years ago I had aspirations of retiring early 😜
i also will have a smallish nhs pension (will have been in nhs for 25yrs so not too long)
and we have a large 5 bedroom house we will sell and downsize, I’m
aware this wont leave loads as bungalows are not too much cheaper.
we may get a small inheritance in the near future but I’m not relying on that.
I’m currently overpaying mortgage and hoping to clear it in 5 years.
i want to retire at 65.
my question is, is it worth extending this small pension and paying a bit more into it or should i just take the pension lump sum and small annuity and save it?
not sure 5 years is enough to make much real difference as we hoping to take it at 60 as 
my 2015 part of nhs pension is taken at 60 meaning i can go part time at that point.

Depends what you are trying to achieve. The correct option is the one which helps you meet your objectives - and you've not said what those are.

There is nothing 'smallish' about an NHS pension covering 25 years of employment with them, whatever your salary is/was! Make sure you understand the scheme properly to ensure you understand what a fab deal you've had through being a member.

V3cash

Marcon said:

V3cash said:

So i have a very small pension pot of around £20,000 from a private pension which matures this April, i can extend it if wanted.
i am 55, years ago I had aspirations of retiring early 😜
i also will have a smallish nhs pension (will have been in nhs for 25yrs so not too long)
and we have a large 5 bedroom house we will sell and downsize, I’m
aware this wont leave loads as bungalows are not too much cheaper.
we may get a small inheritance in the near future but I’m not relying on that.
I’m currently overpaying mortgage and hoping to clear it in 5 years.
i want to retire at 65.
my question is, is it worth extending this small pension and paying a bit more into it or should i just take the pension lump sum and small annuity and save it?
not sure 5 years is enough to make much real difference as we hoping to take it at 60 as 
my 2015 part of nhs pension is taken at 60 meaning i can go part time at that point.

Depends what you are trying to achieve. The correct option is the one which helps you meet your objectives - and you've not said what those are.

There is nothing 'smallish' about an NHS pension covering 25 years of employment with them, whatever your salary is/was! Make sure you understand the scheme properly to ensure you understand what a fab deal you've had through being a member.

I think what I can see on my nhs pension statement is very confusing and everyone I speak to who works in nhs feels the same way. I am sure they make it confusing on purpose 😜

i have worked part time most of the time so I’m not sure it’s as good as what some people outside the nhs think it is. 
what I will do nearer the time is attend a pensions webinar that the nhs offer so hopefully I’ll understand it a bit more.

hopefully it will be as good as as everyone says it is 😊

Marcon

V3cash said:

Marcon said:

V3cash said:

So i have a very small pension pot of around £20,000 from a private pension which matures this April, i can extend it if wanted.
i am 55, years ago I had aspirations of retiring early 😜
i also will have a smallish nhs pension (will have been in nhs for 25yrs so not too long)
and we have a large 5 bedroom house we will sell and downsize, I’m
aware this wont leave loads as bungalows are not too much cheaper.
we may get a small inheritance in the near future but I’m not relying on that.
I’m currently overpaying mortgage and hoping to clear it in 5 years.
i want to retire at 65.
my question is, is it worth extending this small pension and paying a bit more into it or should i just take the pension lump sum and small annuity and save it?
not sure 5 years is enough to make much real difference as we hoping to take it at 60 as 
my 2015 part of nhs pension is taken at 60 meaning i can go part time at that point.

Depends what you are trying to achieve. The correct option is the one which helps you meet your objectives - and you've not said what those are.

There is nothing 'smallish' about an NHS pension covering 25 years of employment with them, whatever your salary is/was! Make sure you understand the scheme properly to ensure you understand what a fab deal you've had through being a member.

I think what I can see on my nhs pension statement is very confusing and everyone I speak to who works in nhs feels the same way.

i have worked part time most of the time so I’m not sure it’s as good as what some people outside the nhs think it is.
what I will do nearer the time is attend a pensions webinar that the nhs offer so hopefully I’ll understand it a bit more.

hopefully it will be as good as as everyone says it is , i have to admit it is a reason i use to stay working in NHS as I don’t want to let that benefit go.

Working part time means you earn less than someone working full time, so it follows that your pension is going to be lower, since the scheme benefits are related to how much you earn. It's every bit as good - and certainly likely to be very considerably better - than anything you'd find in the private sector.  

V3cash

I am working full time now as my daughter is grown so hopefully I can boost it a bit more.
I do understand the contributions the nhs contributes is fantastic so am grateful to have it in place.

Dazed_and_C0nfused

V3cash said:

I am working full time now as my daughter is grown so hopefully I can boost it a bit more.
I do understand the contributions the nhs contributes is fantastic so am grateful to have it in place.

That really doesn't impact if though.

You get a pension in accordance with the scheme rules.

Think if it as deferred salary, it's not a pot of money that builds up.

QrizB

V3cash said:

I think what I can see on my nhs pension statement is very confusing and everyone I speak to who works in nhs feels the same way. I am sure they make it confusing on purpose 😜

What does it say on your statement? We can probably help you understand it.

V3cash

Dazed_and_C0nfused said:

V3cash said:

I am working full time now as my daughter is grown so hopefully I can boost it a bit more.
I do understand the contributions the nhs contributes is fantastic so am grateful to have it in place.

That really doesn't impact if though.

You get a pension in accordance with the scheme rules.

Think if it as deferred salary, it's not a pot of money that builds up.

That’s even more confusing as each part has different rules.
I have a 1995 pension and a 2015 part and I think I should have a 2008 part too.( need to check on that )
i really need to talk to a nhs pension advisor i feel 😊

Albermarle

V3cash said:

Dazed_and_C0nfused said:

V3cash said:

I am working full time now as my daughter is grown so hopefully I can boost it a bit more.
I do understand the contributions the nhs contributes is fantastic so am grateful to have it in place.

That really doesn't impact if though.

You get a pension in accordance with the scheme rules.

Think if it as deferred salary, it's not a pot of money that builds up.

That’s even more confusing as each part has different rules.
I have a 1995 pension and a 2015 part and I think I should have a 2008 part too.( need to check on that )
i really need to talk to a nhs pension advisor i feel 😊

Yes you probably do but just keep in mind some of the previous comments.

The NHS pension is a guarantee of pension income until you die. The amount of pension income is based on how many years you have worked for the NHS and your salary level.
The exact calculations are a bit more complicated than that but that is the basic position.

The £20K you have in a private pension is completely different.

The misunderstanding many people have about NHS pensions ( and similar public sector pensions) is that guaranteed income, usually increasing with inflation, is very expensive. So even if your pension is 'only' £10K pa, it is worth a lot of money.

For example if you bought an annuity with that £20K with inflation linking, you might only  get about about £600 pa 

V3cash

Albermarle said:

V3cash said:

Dazed_and_C0nfused said:

V3cash said:

I am working full time now as my daughter is grown so hopefully I can boost it a bit more.
I do understand the contributions the nhs contributes is fantastic so am grateful to have it in place.

That really doesn't impact if though.

You get a pension in accordance with the scheme rules.

Think if it as deferred salary, it's not a pot of money that builds up.

That’s even more confusing as each part has different rules.
I have a 1995 pension and a 2015 part and I think I should have a 2008 part too.( need to check on that )
i really need to talk to a nhs pension advisor i feel 😊

Yes you probably do but just keep in mind some of the previous comments.

The NHS pension is a guarantee of pension income until you die. The amount of pension income is based on how many years you have worked for the NHS and your salary level.
The exact calculations are a bit more complicated than that but that is the basic position.

The £20K you have in a private pension is completely different.

The misunderstanding many people have about NHS pensions ( and similar public sector pensions) is that guaranteed income, usually increasing with inflation, is very expensive. So even if your pension is 'only' £10K pa, it is worth a lot of money.

For example if you bought an annuity with that £20K with inflation linking, you might only  get about about £600 pa 

Thanks that really helpful, I kinda knew the private pension wouldn’t be worth much that’s why I was considering taking the lump sum and annuity now as it’s not really going to account for much more, I would have to put £1000’s in monthly.
i did look at putting more into nhs pension as that was an option. I now wonder if that would be way to go or not if it’s just based on wages.