NHS Pension Question

[OverseasnurseintheUK]

Sorry, not sure where to put this. Wondering about NHS pension access.

I’m an overseas nurse working in the NHS. Planning on moving back to my home country next year and will have paid into the NHS pension system for about four years by then.

What happens to my pension pot and contributions when I leave? Will I have the right to collect a (teeny tiny) pension from age 65, abroad? Or are there a minimum number of contribution years required to collect anything? I understand there are benefits to buying in to the system currently (illness benefit whilst enrolled, etc), but it is a significant contribution each month. (I’ve just made my increment and my contribution has gone from 9.3% to 12.5%, basically eating up whatever wage increase I would have had—a lot to swallow these days!)

Thanks for any help.

Yes it will sit there until you're of pensionable age then you can claim it from abroad.

Thank you! Do you know how I can calculate what the pension would be? The calculator seems to assume I will pay in to it until I retire.

So it's 1/54th of your salary each year, but uplifted for inflation.

Assuming the 12.5% means you're on 48k ish that means it's worth £888 every year in retirement, but this will go up with inflation. To have a pension that big you'd need to put about £20k into a defined contribution scheme.

Sorry - shamelessly being nosey as I never understand the NHS pension. Does that mean £888 a year? So £74 a month? (Understanding it'll be uplifted for inflation as the years go along)

Thanks so much. I’m still not understanding how it works. So I am entitled to 1/54th of my annual salary, but by what factor do I multiply for years paid in to the scheme? i.e., if I retire today after 4 years of service, and have paid an average of 10% of my 40k salary in (technically I’ve paid more as I’m part time but the % is based on my full-time wage, if I understand correctly?), what would my monthly/annual pension be?

I’m on 42k per year, but I guess it’s 48k with the inner London HcAS? Is that factored in to the pension contribution?

Apologies, one more question: so with defined contribution, does that include the amount my employer contributes, or is it just what I put in?

For example, if I pay 10% on 40k x4 years, I will have put in 16k, or 80% of the 20k required for a £888 annual pension, is that right? What then becomes of the employer contribution (which I believe is 20%?) How does that affect my pension pot and ultimate pension return?

thanks again 🙂

If you work for 4 years, you'd get 4/54ths of your salary each year.
If you work for 20 years (I know it's not going to happen for you) you get 20/54ths each year of your retirement.

Nhs pension is a defined benefit scheme. You are your employer pay the contributions and then you get a benefit based on however many years contributions you are made.

defined contribution is a different type of pension that most employees outside of the public sector have. In defined contribution you pay in but you don’t know what pension you will eventually get as it’s all based on how your money invested performs over time so more risky as the employee. The previous poster mentioned defined contribution basically giving an estimate of how much you would have had to have paid into a defined contribution scheme to get out what you will be getting from the nhs scheme which shows that the nhs scheme is still far better

Your and your employer that should say

So that's for each year.

So if you earnt 20k the first year then you'd get 1/54th of 20k so e.g. £370

In the second year you earn 27k or whatever you'd add to the 1/54th you got in the first year another 1/54th for the second year - so now you'd have £500 on top of the £370. Both of these would then be inflation adjusted to the point you retire.

So if you imagine you worked in the NHS for 40 years your pension would be 75% of your career average salary.

This is very helpful, thank you!

I think you need minimum contribution to claim UK Pension, they will most likely tell you that you haven't contributed enough, might be worth giving HMRC a call or talking to an accountant.

If I was you, I would stop all pension contribution and claim it back, then when you leave I would also claim back all my taxes too. Should be a nice lump sum. But up to you, and I would really talk to a financial adviser or an accountant.

Employer and employee contribution are meaningless in a defined benefit scheme. It’s an arbitrary percentage that has nothing to do with the amount of pension you will receive.

In the NHS, you accrue 1/54th of your annual salary for every year you work.

So, if your salary is 48k, then in four years you have accrued 48000/54x4 = £3,555 pension per year, which will be matched for inflation.

It’s one of the best pensions you can get.

It depends when you got your NHS pension, the new schemes aren't the best, old ones yes, it also assumes that your salary is constant and doesn't go up.

I can't remember the exact figures but I spent a lot of time working it out and it just wasn't worth it any more under the new schemes.

For someone that will only be in the UK 4 5 years, it really isn't worth it. Their assumption is that you will be working for the NHS from 25 to 68 earning the same salary:)

For anyone else, I guess it depends if you want to work for the NHS the rest of your life, or if you need the extra money or if you rather use it to pay your mortgage for example, or invest in another property or in stocks and other stuff.

Besides with the way the NHS lets you die these days, you'll be lucky if you reach 70 to use any of your pension.

Log into NHS total rewards
That should give you an accurate pension valuation and projection

www.totalrewardstatements.nhs.uk

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Yes it’ll have to just be left their until you reach retirement but will revalue each year.

As the simplest example I can possibly think of you’re 40 years old, you work 1 year full time and have a salary of £10,000.
You plan to retire at 60 and you die at 80.

You pay contributions of 10% so £1,000
Employer contributions of 20% so £2,000

Total contribution - £3,000 but this has no real relevance to the pension calculation. This money gets put into investments and bonds to make money behind the scenes.

You accrue £185 of pension for that year.

Assuming no inflation (this will not be the case) your pension is still worth £185 when you take it at age 60.

You are paid your pension until 80 which is 20 x 185 = £3,700 you’ve received.

It’s much more complex over many years, working part time/ full time with varies revaluations so definitely log onto Total Rewards to see what it’s worth at the mo.

Sorry just realised the retirement age on the 2015 scheme is 65 minimum, so please re-read my example as retiring at 65 and living until 85.