NHS Pension and state pension

jue

I am 37 (38 soon) and have paid into the NHS pension scheme since age 17, my question is am I also entitled to the normal state pension at retirement age as well as my NHS supperan or not?
Thank you for such a great board ;D

margaretclare

Yes! Assuming you're paying full National Insurance contributions and you keep up these contributions throughout your working life, you'll get State Retirement Pension.

I assume you're thinking that because you've opted-out of the S2P (state second pension), what used to be SERPS, you're worried about this?

I was told many years ago by an expert that the NHS pension payment was the best investment I could make. Please don't stop paying into it! It is now helping to fund a comfortable retirement for me.

Best wishes

Margaret

jue

Thank you very much Margaret for your reply, yes I was thinking about the SERPS.
I know I've a while before I retire (20 years maybe )
I will continue to pay my pension ;D

MarkyMarkD

@margaret

There are pension schemes around which state that your final salary based pension will be your total pension INCLUDING STATE PENSION. In other words, when they pay out, they deduct the state pension you will receive and pay the net amount. I don't know if this applies in the NHS, but it is not safe to assume it does not apply across the board.

margaretclare

@margaret

There are pension schemes around which state that your final salary based pension will be your total pension INCLUDING STATE PENSION.  In other words, when they pay out, they deduct the state pension you will receive and pay the net amount.  I don't know if this applies in the NHS, but it is not safe to assume it does not apply across the board.

Hi Marky

This is new info for me - I'd never heard of it before!

It didn't use to apply to the NHS scheme when I was paying into it, but who knows what changes have come about in the last few years. I wouldn't like this idea at all!!!

Margaret

MarkyMarkD

A little Google search reveals this website http://www.unifi.org.uk/research/rights/clawback.htm which discusses the issue and names some of the big banks which operate this practice:

Tens of thousands of staff at Barclays, Lloyds/TSB, HSBC, Royal Bank of Scotland, Bank of Scotland, Standard Chartered, and GRE insurance are affected. Even the ‘ethical’ Co-operative Bank fails this test.

It may affect other business too but this is the first list I found on the 'net. I doubt that it applies to the public sector.

By the way, the article is written from the Union's point of view so I don't agree with its conclusions. The employers are offering a company pension scheme which is worth far more than the basic state pension. If they choose to offer something which is slightly less "gold-plated" than other occupational schemes, because they deduct the state pension equivalent, that's up to them. I'd rather see employers introduce a state pension deduction than abandon final salary schemes in their entirety, which seems to be the popular alternative.

sarahlouise210

mmmmm.. did not know that re final salary pensions! Anyway Jue...will you get your NHS pension at 60?? As you are 37 (nearly 38!) you will not get your state pension until you are 65 (if it still exists by then!!) ???

jue

I agree I won't be relying on the state pension, but I thought it may be a useful addition in my retirement.
Thankyou everyone for your comments.
I plan to save like mad as well to add to my pension, nothing like having a bit put by to help you sleep at night

margaretclare

I plan to save like mad as well to add to my pension, nothing like having a bit put by to help you sleep at night  ;)

Yes, this is what it's all about, peace of mind, the ability to sleep peacefully of a night without waking up in a cold sweat wondering which of your creditors is going to come banging on the door....

Margaret

djohn2002uk

The NHS pension is NOT reduced by the amount of the state pension. I know this because my wife has just started receiving hers. Civil Service and Local Authorities are the same. They are all independant of any other income you may have, unless you take employment back with the people who you have your pension with.

Debt_Free_Chick

MarkyMarkD said

The employers are offering a company pension scheme which is worth far more than the basic state pension. If they choose to offer something which is slightly less "gold-plated" than other occupational schemes, because they deduct the state pension equivalent, that's up to them. I'd rather see employers introduce a state pension deduction than abandon final salary schemes in their entirety, which seems to be the popular alternative.

And it's a very valid point, well made.

By way of background ... back in 1978, when SERPS was introduced, many employers reviewed the way that final salary pensions would be calculated. Some of them made a conscious decision to "integrate" their company pension scheme with the state pension scheme. They determined a target pension for the average employee, to include the pension provided by the state. They then set their company scheme up to "bridget the gap" between the amount the state would pay and the target income.

Of all the employers I've worked with over the years (as a Pensions Manager), there's not been one who saw this integration in the same vein as "clawback" viewed by the Unions. It was a genuine attempt to view "the bigger picture". Of course, without integration, the company would have provided a bigger pension at a bigger cost - and that may well have resulted in no scheme at all.

Unfortunately, constant Government tinkering with State pensions means that many schemes are providing something different to what was intended. No wonder employers are going for the money purchase option.