nhs pension question

happilass

Hi,
can anyone tell me if I take retirement at 55 years, which I qualify for, and take my nhs pension then will my payments be less than if I had delayed retireing until 60? What I mean is is there a set pot which is depleted by 5 years if I go at 55? I know that I would be paying into the scheme for an extra 5 years if I go at 60 but my question is will I just not get the 5 years worth of money I would have had at 55 if I delay going until 60, or will I get that money added on to my pension later?
My thinking is if I just won't get the money added on later I could go at 55 and then go back whilst getting payed and getting my pension. This seems odd though because in that case why don't all people go at 55, if they qualify, and just take the pension money as well as working?
I hope that this makes sense!!
Happi

Ian_W

The NHS pension scheme is a final salary scheme so the benefits are defined and provided you make your contributions the benefits don't relate to a "pot" of money as such.

Each full time year of service is worth 1/80th of your final salary [part time is credited pro-rata] so if for arguments sake you have 30 yrs service at age 55 and your salary is £25Kpa you'd get a pension of £9375 plus a lump sum of 3 times your annual pension [in this example £28,125]. You now have the option of surrendering some annual pension for a larger lump sum but I won't complicate it too much by going there!

If you work F/T until 60 you'll get 35/80 of final salary - which on the example is a pension of £10,937 and lump sum of £32,812 - though your pay is likely to have risen quite significantly as well meaning the figures are likely to be a fair bit higher.

Simple answer to your query about retiring, taking your pension then going back to work is on P42 of this booklet:
Which states that if you're already receiving scheme benefits [ie: you've retired] you can't rejoin the scheme other than in limited circumstances which don't apply to what you're suggesting. Nothing to stop you going back to work in the NHS but you can't rejoin the pension scheme.

To retire at 55 you have to be one of the "special classes" [p.44 of the booklet] and you could have bought "extra years" during your service to ensure you had a full or at least fuller pension by 55. Unfortunately for you that option ceased to be available on 1st April.

HTH, & BTW Mrs W bought extra years and retires on a full pension at 55 next April. Very expensive but she thinks it's worth it!

happilass

Hi
thanks for the reply, I didn't realise that I couldn't rejoin if I retired at 55 so that's very helpful. By the way i have "expressed and interest" in buying added years before 1st. April so i am actually not "unfortunate"!
Thanks again,
Happi

Ian_W

happilass wrote: »

By the way i have "expressed and interest" in buying added years before 1st. April so i am actually not "unfortunate"!

Good on you! It is quite expensive as, notionally at least, you pay the full cost with no employer contribution but it will get you a better pension at age 55 if that's when you choose to retire.
BOL with it.

happilass

Hi Ian W,
yes it will be quite expensive but worth it in the long run as the contributions are taken before tax, even though there are no employer contributions this alone makes it worth the doing. Not only will I get a better pension but I will also get a bigger lump sum, since that is 3x my annual pension, so it is a no brainer if you can afford it. By the way what does BOL mean?
Thanks for the reply,
Happi

Ian_W

happilass wrote: »

By the way what does BOL mean?

Best Of Luck.

Don't know if you're aware that as well as a lump sum of 3x pension from 1st April you'll also have an option of surrendering some more of your annual pension for a larger lump sum. There's a calculator HERE you can use to see what is available.

happilass

Hi, yes I did know about that but I'm not sure if I will retire at 55 or go on yet so i will defer any decision about changing to the new scheme until I've made my decision on the retirement date. At my age I can only deal with one thing at a time!!!