NHS pensions are they really that good ? Or is this a windup ?

[Neapolitanicecream]

My friend has worked at the nhs for the last 7 years as a band 7. And now her NHS pension is now worth 20k a year. Is this possible? She also indicated that her boss had add some extra money but I don’t know if that was as salary or in pension. Now thinking of joining Her NHS trust/ department

20k a year after 7 years service? Haha. No.

I have coming up to 5 years service and mines worth 3k a year last time I looked. Same band.

No, its not possible. I'm a band higher, about 23 years service and mine is worth about £8k per year I think

No, definitely not correct - that might be her final pension once she has done the full 40 years, but not after 7 years.

I’ve been in the pension scheme since 2002, am currently on a consultant salary, and my pension is worth about £16k.

That’s complete bollocks. She either doesn’t understand her pension or is lying.

Does she mean it will be £20k when she retires i.e. after loads more years of service?

She’s mistaken - it’s good but not that good! Also people always forget that having ~10% employee contributions HURTS - especially when a similar amount is coming out for student loans!

Band 7 is around £42k? 9.3% contributions over 7 years… I suspect she means she’s paid in £20k and doesn’t understand how it works.

Nhs pension has a 1/54 accrual rate so to have 20k in pension she would have had to have earned over 150k a year which is way over band 7. I think your friend is confused.

20k a year after 7 years service? Haha. No.

Isnt the pension based on predictions though. I.e if you earn 50k for the next 40 years your pension will be X!

meant ? not !

No that’s not right. She’s probably misunderstood

I’m same band and worked for much longer and at 8 K

maybe 20k after 40 years service ?

No, definitely not correct - that might be her final pension once she has done the full 40 years, but not after 7 years.

Surely she's talking about the future unless she's planning to retire now?

I'm in the public sector & my pension statement forecasts my pension based on working for X number of years. There would be zero point in having a forecast otherwise.

Yeah but OP is saying her friend is saying it's worth 20k NOW, not the predicted rate. I have 24 years left at current retirement age, so will have paid in 29 years and it doesn't predict 20k a year for me. If I retired now (I wish) I'd get not very much per year.

That’s probably her pension forecast if she keeps contributing until 68 or whatever her retirement age is.

Unless she’s transferred some pension from her last job….I’m band 7 ….done lots more than 7 years….my pension which I’m taking at 57 next month is around 18k pa plus a lump sum

That sounds like her projection at retirement in 30-40 years or so.

It’s a great pension and I left a lovely job to move to the nhs for the pension.
but as people have said, she’s likely to get around half pay when she retires if she has full service, so yes that would be around £20k for a band 7.

She's way out.I've been paying into mine for 35 years - for 20 of those years I have been in bad 6 or 7 posts. I will not be receiving 20k a year, or even near it.

Could she mean if she stays until she retires it'll be worth that? As for value, I'm lower band admin and the NHS pension is the best I'll get by far, my private pension adviser told me to put that one on hold in favour of the NHS one; but I don't know whether it's the same for higher earners or if they could get similar pensions elsewhere.

One if my DC just joined the NHS and her employer contribution is >20%! This is such a great thing for a young person to be able to tuck something away so early.
At the same age I was using IVC to put the combined contribution up to 17.5% as that was the maximum the government allowed. It would have make a huge difference over my working life to have had that boost so early.

Does your friend mean that there's £20k a year going in to her pension, rather than that being the return?

My friend has worked at the nhs for the last 7 years as a band 7.

How many years did she work for the NHS as a band 1/2/3/4/5/6?

And now her NHS pension is now worth 20k a year. Is this possible?

Potentially, depending on how many years she has worked in the NHS. Top of band 7 salary is £45,839, and she will earn 1/54th of this a year towards her pension. 1 ÷ 54 × 45,839 = 881.52

881.52 × 7 = 6170.63 - the total yearly pension that she has earned in the last 7 years. It'll be more if she's done antisocial hours or overtime.

She also indicated that her boss had add some extra money but I don’t know if that was as salary or in pension.

You can buy up to £6500 extra pension a year. But it's expensive, and gets more expensive as you get older.

Now thinking of joining Her NHS trust/ department

The NHS pension is good, but not as good under the new/2015 scheme. If you want to retire early before state pension age of 68, then you lose a significant amount of your pension. For example you lose 34% if you choose to go at 60, under the 1995 scheme you wouldn't lose anything.

No chance, I worked for the Civil Service for 27 years & got my pension enhanced to 30 years due to ill health & only get £6k a year.