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  • FIRST POST
    • andy001
    • By andy001 10th Oct 18, 6:38 PM
    • 56Posts
    • 24Thanks
    andy001
    A quarter of a million staff opt out of NHS pension
    • #1
    • 10th Oct 18, 6:38 PM
    A quarter of a million staff opt out of NHS pension 10th Oct 18 at 6:38 PM
    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
    I'm not a Financial advisor.
    Please seek independent financial advice.
Page 1
    • woolly_wombat
    • By woolly_wombat 10th Oct 18, 6:44 PM
    • 585 Posts
    • 385 Thanks
    woolly_wombat
    • #2
    • 10th Oct 18, 6:44 PM
    • #2
    • 10th Oct 18, 6:44 PM
    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
    • By Andy L 10th Oct 18, 7:29 PM
    • 9,194 Posts
    • 7,859 Thanks
    Andy L
    • #3
    • 10th Oct 18, 7:29 PM
    • #3
    • 10th Oct 18, 7:29 PM
    That is worrying.

    It's tempting to brand these people as young numpties, but I suspect that some of them are really struggling financially.
    Originally posted by woolly_wombat
    From the article many are high earners who are hitting the lifetime allowance
    • atush
    • By atush 10th Oct 18, 9:41 PM
    • 17,253 Posts
    • 10,821 Thanks
    atush
    • #4
    • 10th Oct 18, 9:41 PM
    • #4
    • 10th Oct 18, 9:41 PM
    I suspecct some dont understand what a great pension it is as well.
    • Kit Katt
    • By Kit Katt 10th Oct 18, 10:19 PM
    • 18 Posts
    • 19 Thanks
    Kit Katt
    • #5
    • 10th Oct 18, 10:19 PM
    • #5
    • 10th Oct 18, 10:19 PM
    It's always been knows as one of the best pensions out there
    • AnotherJoe
    • By AnotherJoe 11th Oct 18, 12:15 AM
    • 11,077 Posts
    • 12,772 Thanks
    AnotherJoe
    • #6
    • 11th Oct 18, 12:15 AM
    • #6
    • 11th Oct 18, 12:15 AM
    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..
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Pollycat
    • By Pollycat 11th Oct 18, 1:44 AM
    • 20,901 Posts
    • 56,312 Thanks
    Pollycat
    • #7
    • 11th Oct 18, 1:44 AM
    • #7
    • 11th Oct 18, 1:44 AM
    I suspecct some dont understand what a great pension it is as well.
    Originally posted by atush
    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
    • By badmemory 11th Oct 18, 3:37 AM
    • 2,137 Posts
    • 3,015 Thanks
    badmemory
    • #8
    • 11th Oct 18, 3:37 AM
    • #8
    • 11th Oct 18, 3:37 AM
    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
    • By woolly_wombat 11th Oct 18, 9:41 AM
    • 585 Posts
    • 385 Thanks
    woolly_wombat
    • #9
    • 11th Oct 18, 9:41 AM
    • #9
    • 11th Oct 18, 9:41 AM
    From the article many are high earners who are hitting the lifetime allowance
    Originally posted by Andy L
    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
    • By ex-pat scot 11th Oct 18, 9:49 AM
    • 282 Posts
    • 342 Thanks
    ex-pat scot
    From the article many are high earners who are hitting the lifetime allowance
    Originally posted by Andy L
    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
    • By Andy L 11th Oct 18, 9:52 AM
    • 9,194 Posts
    • 7,859 Thanks
    Andy L
    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.
    Originally posted by ex-pat scot
    True but, in the case of GPs, they pay both the employee & employer contributions
    • kidmugsy
    • By kidmugsy 11th Oct 18, 11:00 AM
    • 11,814 Posts
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    kidmugsy
    You'd expect youngsters predominately to opt out because they ... may not intend to stay very long
    Originally posted by AnotherJoe
    An argument that seems to be as common as it is bogus: silly, silly "younger people".
    Free the dunston one next time too.
    • SuiDreams
    • By SuiDreams 11th Oct 18, 11:34 AM
    • 2,312 Posts
    • 10,295 Thanks
    SuiDreams
    My sister worked in the NHS for about 10 year (maybe more), she never paid into the pension scheme, she thought the 3% they wanted to take off her when she 1st stared was a bit expensive. You can't tell some people.
    • fred246
    • By fred246 11th Oct 18, 4:47 PM
    • 1,143 Posts
    • 653 Thanks
    fred246
    I sense a sort of change in 20 to 30 year olds. I used to say "work hard. Pay into your pension. Retire early." The young people now are saying that retirement isn't something that's going to happen for them. Take it easy. Don't work too hard. It's a long way to go. You will always work and never retire. If you'll never retire a pension isn't necessary.
    • andy001
    • By andy001 11th Oct 18, 6:02 PM
    • 56 Posts
    • 24 Thanks
    andy001
    A the OP stated, "worrying trend amongst younger people" when looking objectively at the graph.[/QUOTE]

    I was focussing on the graph alone and NOT looking at greater details. Thanks for pointing it out.

    NHS pension / DC pension: LTA, AA taxes, tapered allowance taxes are some of the reasons why senior members are leaving.

    If October budget again reduces AA , then likely it's not cost effective to stay in.. Ministers are tinkering pension too often and making it less attractive with each change.

    If there is exodus from such pensions, who will pay for retired members ? it is reliant on contributions from existing members to pay for retired folks.

    NHS still needs senior doctors, consultants and GPs to stay on
    & younger ones should be looked after well with pension etc so they don't Emigrate to Oz

    See article from Altmann.. interesting read ..

    https://www.telegraph.co.uk/news/2017/04/07/perverse-pension-rules-driving-best-workers-labour-market/
    I'm not a Financial advisor.
    Please seek independent financial advice.
    • kidmugsy
    • By kidmugsy 11th Oct 18, 8:10 PM
    • 11,814 Posts
    • 8,316 Thanks
    kidmugsy
    All this biz about doctors retiring early - and it's true; I know two - is just an example of the fact that people respond to economic incentives.

    You put up minimum wage - employers will employ fewer staff.
    You put up pay - you'll find it easier to attract and retain staff.
    Et ruddy cetera. It's not rocket surgery.
    Free the dunston one next time too.
    • Malthusian
    • By Malthusian 12th Oct 18, 3:30 PM
    • 4,824 Posts
    • 7,742 Thanks
    Malthusian
    There's an increasing consensus that the Lifetime Allowance is pointless and should be scrapped. While I agree in principle, I wonder if the reason it won't happen is not because HMRC would miss the (relatively trivial) take from Lifetime Allowance charges, but because we can't afford for high-earning NHS staff to go back into the NHS Pension Scheme en masse. (And other civil servants with large DB pensions.)
    • ex-pat scot
    • By ex-pat scot 12th Oct 18, 5:41 PM
    • 282 Posts
    • 342 Thanks
    ex-pat scot
    There's an increasing consensus that the Lifetime Allowance is pointless and should be scrapped. While I agree in principle, I wonder if the reason it won't happen is not because HMRC would miss the (relatively trivial) take from Lifetime Allowance charges, but because we can't afford for high-earning NHS staff to go back into the NHS Pension Scheme en masse. (And other civil servants with large DB pensions.)
    Originally posted by Malthusian




    NO.




    The reason the ludicrous LTA won't be scrapped is quite simple.


    It would be because it would be an open invitation for the opposition to scream "HUGE TAX BREAK FOR TERESA'S RICH CHUMS" or some such nonsense.
    • BobQ
    • By BobQ 12th Oct 18, 11:50 PM
    • 10,042 Posts
    • 13,224 Thanks
    BobQ
    There's an increasing consensus that the Lifetime Allowance is pointless and should be scrapped. While I agree in principle, I wonder if the reason it won't happen is not because HMRC would miss the (relatively trivial) take from Lifetime Allowance charges, but because we can't afford for high-earning NHS staff to go back into the NHS Pension Scheme en masse. (And other civil servants with large DB pensions.)
    Originally posted by Malthusian
    Not only does the Government get a lot of dosh from people exceeding the LTA, there are rumours that the Budget will see it reduce and raise even more.

    "The amount of money raised from those exceeding the lifetime allowance has surged by nearly 2,000 per cent over the past decade.

    For the first time HM Revenue & Customs has released figures showing the total tax take from those exceeding the lifetime allowance tax has increased from 5m in 2006/07 to 102m in 2016/17.
    Most of the increase has taken place since 2012 when the government started cutting the lifetime allowance from 1.8m to 1m.
    Meanwhile the tax raised from those exceeding the annual allowance has increased from 2m in 2006/07 to 561m in 2016/17 - an increase of nearly 28,000 per cent."

    From the FT
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
    • AnotherJoe
    • By AnotherJoe 13th Oct 18, 12:58 AM
    • 11,077 Posts
    • 12,772 Thanks
    AnotherJoe
    An argument that seems to be as common as it is bogus: silly, silly "younger people".
    Originally posted by kidmugsy
    Ive got some sympathy with that argument, its not totally dud..

    Lets say this is a going to be 2 or 3 year job, its likely not that well paid, the utility of the extra money now may well be more useful to someone than income in 40+ years time. Money in 40 years time isn't always better than money now.

    The money might mean the difference between being able to pay the rent or not. Of course if it just means they can have an extra decaf moccochino with their smashed avocado on toast its a different matter.

    And lastly they may decide that when they start their real job and progress up the career ladder, in a few years time the much larger salary they earn then will very quickly allow them to put in the pittance they didn't put in aged 21.

    Of course in reality for many, the xtra few % wont be missed, the 2 or 3 year job turns into a 20 or 30 year job or, 20-30 x 2-3 year jobs and the money now would only have been spent on heinz instead of lidl baked beans and the discipline of contributing to a pension carries through to higher salaries (rather than opting out and never back in again as theres always something else to do with the money)

    But even given that I wouldnt dismiss out of hand everyone for not taking the pension. (the civil service person was wrong because he didnt use any of the above reasons, he simply had a complete failure to understand how the pension worked, worrying for a supposed high flyer)
    Last edited by AnotherJoe; 13-10-2018 at 1:01 AM.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
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