Recommended reading on increasing pension payments?

kendricks1

I'm still trying to figure out the advantages of overpaying into my nhs pension or private pension.
Is there anything to read on the subject,like pensions for dummies as its about as clear as mud 🤔 

HedgehogRulez

The more you pay in, the more you get out is the general principle.

crv1963

kendricks1 said:

I'm still trying to figure out the advantages of overpaying into my nhs pension or private pension.
Is there anything to read on the subject,like pensions for dummies as its about as clear as mud 🤔 

There are a number of options that you have, depending on how long you want to commit to paying additional monies into a pension and when you want to access the pension(s).

1) Look at the NHSBS website and "how to increase my pension". There is a calculator to increase your pension at retirement by amounts of £250 these get the annual inflation increase but not the employer 1.5%, good for reducing earning below the HR tax rate.

2)There are options to take the pension 1, 2, or 3 years early and calculator to the cost of each.

there are advantages to both or a combination of the above options.

3) SIPP- You have full responsibility for the investment choices and the amount saved. Advantages- you can take 10 years before your NHS pension which is due to pay out at SPA or earlier with reductions. It also has a 25% TFLS which the 2015 NHS pension doesn't have. There is greater flexibility on both contribution and withdrawal rates. Disadvantage NHS Pension is 100% guaranteed the SIPP depends on share price growing.

4) Other investment options- ISAs, Savings, Premium Bonds.

I have a bit of both, monthly additional NHS contributions to reduce HR tax and a smallish amount in a HL SIPP but all I did was have a good read through some of the threads on here, asked lots of questions for understanding and clarity. I also read widely on the pension providers- HL, AJBell, and other links posted. I completed some of the risk calculators, which seeing as this was about 10 years ago have proved pretty accurate for my appetite for risk.

Good luck

Hoenir

With the NHS scheme you've certainty as to the income you'll receive. Might make planning easier. 

Marcon

kendricks1 said:

I'm still trying to figure out the advantages of overpaying into my nhs pension or private pension.
Is there anything to read on the subject,like pensions for dummies as its about as clear as mud 🤔 

Are you asking about increasing pension payments generally; or increasing your NHS pension v a private pension?

kendricks1

Sorry about is one favourable than the other,thanks 

crv1963

kendricks1 said:

Sorry about is one favourable than the other,thanks 

That all depends on your personal goals.

Over paying or buying additional NHS Pension means a larger pension at SPA or earlier if you take either a reduced pension or buy an earlier retirement date. It gives certainty over income and is inflation proof for life, it also gives a survivors pension.

SIPP gives access to the SIPP pension 10 years before the NHS pension can be accessed so gives flexibility to either reduce hours, retire earlier and the whole SIPP can be inherited by someone else if designated. It does depend on stock market performance and is (edit) not guaranteed.

Then there is your current tax position to consider with both options, it reduces the amount of tax paid for both, your age and your overall retirement goals.

Only you can really decide what your aims are, also your current age may influence the decision- the longer you have to retirement the cheaper the NHS additional pension in terms of monthly deductions and if using a SIPP the longer the time in the market the greater the chance to grow the pension pot. It also depends on what you can afford to save now, try playing around with both the NHS Pensions site and one or more of the savings calculators on the internet and that may inform your decision.

kendricks1

Thanks kindly great information 

Moonwolf

I missed this earlier, was off being retired.

I posted this ages ago based on my thoughts when I wanted to increase my NHS Pension, these might help, although I should probably take the time to update it.

https://forums.moneysavingexpert.com/discussion/comment/78669411#Comment_78669411