NHS pension help please

[fussygalore77]

Hi

I'm trying to understand my pension pot a little more.
I'm 45 worked for the NHS for a while ( 18 but had a career break for around 3 years and was part time for a couple of years,).

I'm in two schemes. The 1995 and 2015, can I check my understanding is right both pots combined with , ATM give me around 13k a year pension? Is that right. I'm a band 8 now, so salary has gone up over the last few years but likely to stay stable now. I will be working for at least another 20 years. Is there a way I can estimate what my final pension could look like?

Thanks

Looks as though you have two pensions. One frozen in the 2016 scheme and payable at 60. Current estimated pension £8186. Is that figure increasing from one year's statement to the next? I don't think you can add any more years to that but it will be re valorised for inflation at payment; if the amount predicted increases then it suggests it's being valorised annually.

The second is in the post 2015 scheme and currently payable at 67 and a bit. I think this is a Career Average (CA) scheme so your final pension will be based on average over your time in the scheme rather than salary when you retire.

You will add additional years in that scheme and thus more pension at 67 as long as you are working and paying in. I'm not clear though how that service accrues and increases what you get.

I'd expect it to add 1/60th of pay to the final average for each year but I'm not familiar with how CA schemes accrue and nothing on the statement explains it.

Short answer OP, yes. 13k combined both pensions at 60.
Do you have special class status ?

Important to note that the 1995 pension is closed for contributions. That pension figure only goes up with an increase in salary ( and I think inflation as the last poster mentioned ).

If it rises with inflation it might not be the real inflation figure but a capped amount, say 5% ( when retail inflation might be 9% ).

There’s an NHS pensions group on Facebook, sorry, can’t remember it’s name right now.

Apologies OP, as the pp pointed out the figures for the later scheme assume you leave it until you’re 67.
If the later scheme is a ‘Defined Contribution’ scheme, I know in private industry you can access them from 55, but you have say 5% deducted for every year below 67 you access it.

Remember you’re state pension comes in at 67 too.

Thank you all, that's really helpful.

I don't have special class status. And I'm planning on staying with the NHS at least until 65! Depending on if I can leave a little early.

The 1995 pension does fluctuate, it's gone up a little this year. I'm getting worried about retirement but if I stay on similar salary and keep paying in my pension should be fine! Current salary is around 51k so 1/60 is £850 and if I work another 20 years that's potentially another £17k on top of the. Projected 23k per year I have ATM... Is that right? Or am I being dim

The figures for the 1995 scheme indicate you can take it at 60.
As it’s not possible to contribute, to build up the ‘pot’ in that scheme , you really should take that pension at 60.
What’s common is a Retire and Return ( R&R ) scheme where you retire , that is take the 1995 pension at 60 , then return part time. say 4 or 3 days a week , during which you’re still contributing into the later scheme.

The accumulation rate for the new NHS pension is 1/54 of salary, not 1/60, so the figures will actually be a bit higher than you’ve worked out.

@Hazelnut5
Is that 1/54 across the NHS or is it a different fraction depending on the role?

1/54 across the NHS. See P7 of the guide https://www.nhsbsa.nhs.uk/sites/default/files/2017-05/2015%20Members%20Guide%20%28V7%29%2005.2017.pdf.

(And the same in Scotland too, but that’s in a different guide.)

The Mccloud judgement will also need to be considered.

This usually means that you will be able to decide what you want to do with all pension accrude between 2015 and 2022. Either keep it in the 2015 scheme or it can be moved to the 1995 scheme.

https://www.nhsemployers.org/articles/mccloud-remedy

1995 section is closed but - as long as you don't have a break of 5 years or more - is linked to your final salary when you leave the NHS (or take the pension, if you do retire & return or partial retirement at 60). It will be (the best year of your last 3 years of work÷80) times your reckonable service. The lump sum shown is the minimum - you can give up some pension to take a larger lump sum if you want. If you don't take the pension at 60, and are still working in the NHS, you don't get backpay when you do take it - that unpaid money is lost. Any change in your working hours now has no effect on the 95 pension, but a change in grade would.

The 2015 pension grows by 1/54 of your salary every year (those fractions are uplifted by inflation plus 1.5% every year, or by inflation only of you have left the NHS; the inflation figure is the Septmber CPI, it is not capped as a PP suggested) and pension age is the same as your state pension age. If you leave it until after pension age it will grow more - unlike the 95.

If you want to take the 2015 pension early, you can but it will be reduced unless you pay the ERRBO premium. This lets you buy your pension age down to 65 - but only applies to pension accrued while paying the premium, it is not backdated to cover earlier accrual. So if you want to do that, start it at the beginning of the next financial year (apply around January, the forms take a while).

Both pensions are index linked, so will go up with inflation each year after you have retired.

McCloud calculations - previously the TRS figures showed your McCloud years in the 2015; they are now changing that and in future it will show them as part of the 1995 as the default. But when you retire you will be given the choice of which scheme you want them to count towards.

Thank you all so much! My brain hurts just thinking about it all but this has been so incredibly helpful