NHS pension

theone8181

theone8181

theone8181

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Sorry if this is in the wrong thread but my wife is starting a new job soon. I've been researching the NHS pension as I assume she will go into it by default (pharmacist in drs surgery). So is it as good as it looks, from looking in the internet NHS contribute 14% and she'd be putting in 10 or so. I'm going to get her to ask her new boss/hr but I'd just like to be forewarned on it.

Cheers
 
It's a pretty good scheme although it was neutered substantially by the 2015 changes it's still about as good as it gets from a pension point of view.

As said above your pension contribution depends on your total pay.

Employee contribution is pre-tax.
 
Minstadave said:
It's a pretty good scheme although it was neutered substantially by the 2015 changes it's still about as good as it gets from a pension point of view.

As said above your pension contribution depends on your total pay.

Employee contribution is pre-tax.
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as above - pay into it - forget about it for a while. Best your going to get.
 
doopydug said:
What does that mean? Its pointless to make extra contributions?
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Career Average Re-valued Earnings pension.

Say OPs wife is earns £40k in a tax year she'll get 1/54 of that 'average' salary so ~£740 in pension. Next year she might get a pay rise mid year and her pay for that tax year works out to be £43k so she'll get ~£796 in pension. And so on and so on, that all adds up while you're employed and then you get that as your pension.

On £40k the monthly pension contribution from her salary would be 9.3%, so £310 according to listentotaxman.com. Effectively paid £3720 to get a 'guaranteed' £740 a year from state pension age.

You can make additional contributions in the form of 'buying additional pension' and there will probably be some form of voluntary contribution scheme run by a pension provider, but there won't be employer contributions, just employee.
 
@Azza I'm not sure if I understand. I work for the NHS too, and got am in the NHS pension scheme too. Not sure I understand this bit about "guaranteed" pension etc. Coudl you explain it a bit further? Or link me to somewhere where I could read about it?
 
Azza said:
Career Average Re-valued Earnings pension.

Say OPs wife is earns £40k in a tax year she'll get 1/54 of that 'average' salary so ~£740 in pension. Next year she might get a pay rise mid year and her pay for that tax year works out to be £43k so she'll get ~£796 in pension. And so on and so on, that all adds up while you're employed and then you get that as your pension.

On £40k the monthly pension contribution from her salary would be 9.3%, so £310 according to listentotaxman.com. Effectively paid £3720 to get a 'guaranteed' £740 a year from state pension age.

You can make additional contributions in the form of 'buying additional pension' and there will probably be some form of voluntary contribution scheme run by a pension provider, but there won't be employer contributions, just employee.
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Funnily enough she is going to be earning the exact amount from your example:p. I wasn't sure as we are both 34 and wanting to retire at 55 (well I am anyway:D), how much she'd end up with, 21/54ths of her final salary? What do you gain by paying extra, an extra 54th?
 
theone8181 said:
Funnily enough she is going to be earning the exact amount from your example:p. I wasn't sure as we are both 34 and wanting to retire at 55 (well I am anyway:D), how much she'd end up with, 21/54ths of her final salary? What do you gain by paying extra, an extra 54th?
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Note that the pension is based on the state retirement age (currently 65)
If one is going to retire 10 years earlier, the reduction is pretty significant. The pension would be c60%
So in this case...
21 years x £730 x 0.6 = £9300/yr

Also jfyi that the pension calculations are based on basic pay without additional pay supplement/uplifts (eg nights weekends etc). So if the £43k is based on, say £30k basic salary, and £13k for nights/weekends and on-calls, then the number for the purposes of pension is £30k
 
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theone8181 said:
Funnily enough she is going to be earning the exact amount from your example:p. I wasn't sure as we are both 34 and wanting to retire at 55 (well I am anyway:D), how much she'd end up with, 21/54ths of her final salary? What do you gain by paying extra, an extra 54th?
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The NHS pension scheme is still pretty good despite the 2015 changes. Is this her first NHS job?

The main issue with the NHS pension scheme is the heavy penalty on taking it early. Retiring at 55 means you would lose 45% of your contributions:
https://www.nhsbsa.nhs.uk/sites/default/files/2017-03/ARER factsheet (03.2017) V7.pdf

I certainly don't plan to be a 67 year old practicing surgeon, but living costs money!
 
Pension? There won't be any when we retire. Private and public schemes (I'm NHS too btw) will all be sink-holed by the time us middle-aged hit the late 60s. We have to be realistic I'm afraid.
 
Uther said:
Yeah I used to think that when I was young, now here I am at 55 with quite a nice pension that I wish I'd paid a lot more into when I had the chance...
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Yeah of course people need to plan for retirement but the goals posts are constantly shifting cause the numbers aren't sustainable.

The days of gold plated pensions are over and everyone else is having to pay for them
 
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