A quarter of a million staff opt out of NHS pension

andy001
andy001 Posts: 119 Forumite
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in Pensions, annuities & retirement planning
Worrying trend amongst younger people ; as they are leaving NHS pension...

Talk on Pension planning should be compulsory for school leavers.

See article below.

https://www.hsj.co.uk/finance-and-efficiency/exclusive-a-quarter-of-a-million-staff-opt-out-of-nhs-pension/7023522.article
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Comments

  • woolly_wombat
    woolly_wombat Posts: 819 Forumite
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    That is worrying.

    It's tempting to brand these people as young numpties, but I suspect that some of them are really struggling financially.
  • Andy_L
    Andy_L Posts: 12,789 Forumite
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    woolly_wombat wrote: »
    That is worrying.

    It's tempting to brand these people as young numpties, but I suspect that some of them are really struggling financially.

    From the article many are high earners who are hitting the lifetime allowance
  • atush
    atush Posts: 18,726 Forumite
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    I suspecct some dont understand what a great pension it is as well.
  • Kit_Katt
    Kit_Katt Posts: 45 Forumite
    It's always been knows as one of the best pensions out there
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    The stats are not really out of the ordinary they are what you'd expect.
    You'd expect people being hit by /getting close to the LTA to be opting out. And according to the article that's a big part of it.
    You'd expect youngsters predominately to opt out because they are the least well paid, may not intend to stay very long and might reasonably think aged say 21 that a pension at age 67 is not a priority, and of course, they are being asked to enrol as they start, so its a decision point whereas those already in it for years are less likely to pull out even if only because they need to take some action and pensions are a long way down the priority list for most..
  • Pollycat
    Pollycat Posts: 34,680 Forumite
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    atush wrote: »
    I suspecct some dont understand what a great pension it is as well.

    There's been a similar recent thread from the guy intending to opt out of the Civil Service pension.
    It really is the individual's responsibility to educate themselves about something that will impact on their later life.
  • badmemory
    badmemory Posts: 7,788 Forumite
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    They read that it is not as good as it was & take that to mean that it is no longer good. Not that it is no longer fantastic.
  • woolly_wombat
    woolly_wombat Posts: 819 Forumite
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    Andy_L wrote: »
    From the article many are high earners who are hitting the lifetime allowance
    That is indeed what the article says, and having had a highly-respected GP retire young from a local practice I am very aware that it's a problem.

    Looking at the graph, however, and stepping away from any political point being made in the article, it does seem to have been a bit of a knee-jerk reaction to the change in LTA introduced in 2016.

    The proportion of 56-65 year-olds opting out fell back substantially in 2017.

    The proportion of 26-35 year-olds opting out was almost as high as in 2016, and was the age group with far and away the greatest number of opt-outs.

    A the OP stated, "worrying trend amongst younger people" when looking objectively at the graph.
  • ex-pat_scot
    ex-pat_scot Posts: 693 Forumite
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    Andy_L wrote: »
    From the article many are high earners who are hitting the lifetime allowance

    It's usually still advantageous to keep going in a company (/public) pension scheme at or beyond LTA, as long as there is the company contribution. Even with the tax charge, there is still overall benefit.


    There are some (not many, in my experience) companies who have offered salary augmentation in lieu of pension contribution, where an employee is bumping up against the LTA. Those I have seen have required evidence of the LTA status, as they don't want to encourage a steady stream of staff foregoing pension saving for the sake of enhanced current salary.
  • Andy_L
    Andy_L Posts: 12,789 Forumite
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    ex-pat_scot wrote: »
    It's usually still advantageous to keep going in a company (/public) pension scheme at or beyond LTA, as long as there is the company contribution. Even with the tax charge, there is still overall benefit.

    True but, in the case of GPs, they pay both the employee & employer contributions
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