Should I collect my NHS pension now? 1995 section, aged 60.

[Fordian]

I'm still working, but is there any point in NOT collecting the pension I'm entitled to from the 1995 section as its 'normal retirement age' is 60, and I'm now 60? I've been NHS since 2004.

I mean, being a defined benefit scheme that money (in that section) won't grow, will it? So I may as well collect it?

My understanding of the 1995 scheme was that you couldn't draw your pension from it unless you retired from all NHS work? (but NI might be different possibly).

No, I don't think that's the case as I have 2 mates at work who are doing just that, working and claiming.

Presumably you are still in the 2015?

Can you collect it and add it as an avc to your pension for when you do retire?

Depending on circa, could be tax free and be a very good investment.

Would you have to cut your hours to avoid abatement? Don't know if that applies to NHS scheme.

Would you end up paying loads of tax?

I had a quick look at the scheme guide, it says you have to retire for at least 24 hours!

They might have had to leave their employment, claim their NHS pension, then be re employed.

if you take your pension your current employment will be terminated for hmrc purposes. It takes about 4 months for nhs pensions to sort out your pension. There will be a pensions section of your payroll team who can advise. There are changes coming later this year and take effect on 1 October 2023, and includes any 1995 Section benefits you have. From age 55, you'll be able to take between 20% and 100% of all your pension benefits in one or two drawdown payments, without having to leave your current job.

I'm not sure about the tax implications, tbh. I'm not sure if that changes over time. I'm clueless! I'm also on the 2015 scheme, as that move was compulsory.

You can “retire” / resign and then rejoin the NHS. I think it’s still 24 hours you have to be “retired” for.

I would do it if it was me. Many others do it and then get news roles.

Tax wise your pension is taxable so depending on you salary it will be taxed at 20% or 40%.

Yes, I think so, something about 24 hours.

Nhs abatement was abolished during covid....its not been brought back since

Everyone retires and returns where I work.....if you drop to 3 days you are only getting slightly less per month....we all go at 55 as we are clinical

Interesting. My frontline team are now 8O% overseas, and under 40. I am an outlier. But there are certainly other areas (ultrasound/general plain film) where people leave then immediately return on 'bank' which are overwhelmingly as fixed as if they were substantive.

I'm on, and have been on 3 days/22.5 hours for over a decade.

NHS Abatement is cancelled until 2025 at least

Fordham, I’m something of an expert in this - was in exactly this position .
short answer YES , you should absolutely take your 1995 pension when you turn 60. There is no good reason to leave it.
I took mine , am still working , the 24 hour retirement is a paper exercise whereby after the 24 hours your pay stops being superannuated.

also you can’t keep contributing to the 2015 section once you claim the 1995 .

feel free to pm me

Not a pension actuary, but I thought (sometimes) defined benefit schemes had a provision that if you deferred taking your pension it would be increased correspondingly (by what they'd call an actuarial factor). This wouldn't be standard so you'd have to inquire.

It may be that this pension doesn't have that option though? You'd have to ask.

I think the only reason not to take it would be if you are not quite on the top of your increment band.

The 1996 pension is based on the best of your final 3 years pay, usually your last year.

For me, I will have done 12 months at the top of b7 when I am 60 and 7 months. It makes sense to work the extra 7 months as my pension will be calculated on a final salary of £47,600 rather than £43,800 at current rates. I have 21 years wte service up to 2022, so under the McCloud judgment it’s about £1000/ year difference in pension per year by working those extra 7 months. Most people are not such late developers and have been at the top of their pay band for several years by the time they turn 60.

If you are already at the top of your salary scale then you should definitely take the 1996 section at 60, and return on reduced hours if you want to keep working.

@Tigertigertigertiger there has just been consultation on 1995 pensioners being able to continue contributions to the 2015 scheme. Final decision expected in April but out pensions advisor this it's a done deal.
@Fordian I've been researching this as I've just turned 60 and all advice says retire and return. Abatement does not apply as we would be taking our pension at normal pension age. Additional tax does need to be looked at but if you're part time it's still worth it.

Its all confusing. Ive been in it since 1995 so can take it at 55. I dont know why some of our band sevens are still working at 66 without ever taking it. I think its because they have to come back as a six and their pride wont let them. Im leaving mine in unless theres a good reason I should take it out now? Im useless with money so literally would have to put it somewhere.

while Im here I have a question. Im now in the 2015, Im 55 and have cancer. I hope I will recover and beable to work however can somebody talk to me about medical retirement? Is there any benefit to me trying for it as Im now 2015 1995 Ive paid to my max. Would I get anything more if I went for medical reasons?

Why don't you just go and ask HR?

@EachandEveryone the medical retirement rules are complicated. There is a factsheet on the nhsbsa.nhs.net website but i would recommend a conversation with your payroll pension officer rather than HR. I found the pension officer much more knowledgeable. Best wishes for your recovery.