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

Woops, I put 52 into my calculations instead of 54, so...

1 ÷ 54 × 45,839 = 848.87

If she works for another 24 years, then her pension will be worth 20k a year:

848.87 × 24 = 20372

*another 17 years, to give her a total of 24 years at Band 7, assuming that she's not earned any pension in previous years (but guessing that she has).

I work with the pension she is definitely misunderstood. The likelyhood is she is thinking the amount she has contributed is what she will receive. The scheme is salary based as a CARE scheme it's not calculated on the contributions that are made.

Oh and employers do not put extra into the pension they pay the standard 14.38% of the salary. Members have the option to purchase additional pension by contributing extra but employers do not match this.

Oh and because the new scheme is calculated on the salary each year and inflation we cannot predict what the pension will be. The pension statement will show the current value only. She may have got confused as the statement will show the current annual amount but also the amount for a lump sum which you can take by reducing the pension. The lump sum could be the 20k figure she's seen. If she's looking at the first page of the statement this is a breakdown of her salary and how her employer calculates it. It is a big confusion as members assume this figure is their total pension package. She needs to look at page 3 of the statement.

I’m a band 7, with my own contributions and my employers contributions there is around £13k a year being PAID INTO it at the moment, but that doesn’t equal the same return in retirement of £13k a year to be paid out in retirement. I will need to contribute for much, much longer to get the same return in retirement.

I think that’s where the confusion is coming from on this thread.

Maybe she means her pension pot is £20,000 in total, not per year! If she does 30 years she would probably get half final salary. You do pay in quite a few hundred monthly for state pensions like this.

She's definitely mis-reading ESR. She's probably looking at the total value of her pension pot or something.

It’s something like 1/60th of your career average wage for each year you’ve worked. So currently she will have about 7/60th of 40-45k. Nowhere near 20k.

I make it about 4.5k. So if she works another 21 years she might get 19k a year.

Just checked mine - band 7 with 14 years service and it's about £7-9,000 a year (depends if you take lump sum or higher yearly pension)

She may be meaning that if she stays till pension age thats what she'll get

She likely pays around £360 a month as a band 7