Pension planning to not have to work till I drop

[Onemorecoffee77777]

Hello lovely mn finance people I was hoping for some advice.

I’m a nurse in the NHS turning 40 this year so doing a bit of pension planning as my partner turns 50 too so a lot to factor in when it comes to shared retirement.

I have the NHS pension but it will not allow me to retire till 68 without quite severe penalties is my understanding. Partner be 78 by then so that won’t work for us if I work ft till then. He has a pension but it’s not great and certainly not enough to support me too.

So I’m thinking I will plan to leave NHS pension till 68 or as near as but I need something before then - maybe something at 55/60 to allow me to go part time or even stop working as obviously I can’t imagine these long shifts at 60+.

Any advice how I should go about looking at financing this? Is it savings, a private pension, a house rental, or something else? Any suggestions on where to look for advice? I did look at an independent financial advisor and haven’t ruled it out but it’s £1000ish for literally a couple hours so I wanted to make sure I do my homework first. I also don’t have any huge pots of money and no expected inheritance so it’s a 15-20 year plan to get myself in early retirement is what I’m thinking. We should be mortgage free by 55 so that’s already sorted.

Thanks all in advance for any advice!

Look again at IFAs, the advisor I use doesn't charge for consultations, I only pay a small percentage monthly on my investments.

How did you find your IFA? I went for a quote off one of the big ones claiming to understand nhs pensions (which seem to be a complex minefield).

Sounds like you need a SIPP (google it), so you’re investing in a private pension separately from your NHs pension. This is effectively a cash pot you get tax relief on contributions and then you can draw down / take a tax free lump sum once you reach qualifying age (currently 57). I would say it’s the most tax efficient hassle free investment vehicle (vs a buy to let which is hassle, subject to capital gains etc). But I’m no expert…

Get a SIPP and look on MoneySavingExpert forums. As for investments look into low cost Index Tracker funds.

I wouldn't do a house rental - it's a lot of work and maintenance and you risk it being empty for periods of time.

If you need money from age 55, I'd put the bulk of it in a SIPP so that you get the tax relief - free money! You can take the SIPP from age 57. And then I'd put some in a S&S ISA to fund the 2 years between age 55 and 57.

You can learn a lot about early retirement and investing from James Shack on YouTube. The MSE pension forum is also excellent.

When you’ve paid off your mortgage, pay the same amount into an investment vehicle - that should build up over 5 years. Also work out realistically how much you will need to live on. We retired early and we need much less than you think. I would say now we live on about 25-30 % of our previous income.

I don’t work for the NHS but I do have private pension that I pay personally alongside my workplace one. I can access that from age 57. It’s a SIPP so flexible to be able to draw down from.

Pensions are incredibly tax efficient so I would focus your efforts there but also have some sort of ready-available savings too.

I use Reeves and they manage my SIPP and give good, comprehensive advice. They charge a small fee based off your investment. So initial consultation and assessment is free. Let me know if you want a referral code.

Start by talking to Pension Wise which is the UK Gov Backed free pension service, through Moneyhelper. You get a free consultation with a human being as you approach 55. I found them useful. Also Go through the laborious process of getting a current statement for your nhs pension from NHS pensions. Lots of emails and forms and time and waiting for a response but it'll be worth it so that you can really check what you've got and work out what it might be when you come to claim it. There has been loads of farting around with the NHS pension over the last 10 years and you might find some of it is in an older scheme which might start to pay at an earlier age. Apart from that sit down with a spreadsheet (or a piece of paper and a calculator) and work out your true expenditure currently, remember to include everything. Then take that total and decide how you might reduce it and make some savings on your current outgoings as you approach retiring. That will give you your minimum income needs, so then you can start working out how you provide that level of income through all your savings, investments, part time wages and pensions. Good luck.

Thank you all! Sounds like I need to do my homework on a SIPP. I will also look at moneyhelper. That was my thinking on a rental - possible hassle which isn’t my idea of retirement.
Yep I did get my nhs pension statement and it was a hassle as they lost a number of years service which they thankfully found without too much hassle (I haven’t moved jobs so god knows how they lost it) but did make me realise I need to not just put my head in the sand for retirement and think it’ll all be fine, but try plan for it to be fine.
Very good idea to try work out my finances too to see what I’d need for retirement.

Yes please stickortwigs I’ll take that referral code.

Sent it to you on DM 🙂

I would simply work out how much I could afford to put away and start putting it away! Either as AVC to your work pension, to a SIPP or just a S&S ISA (up to £20k pa) with Vanguard or similar.
You need to know, at some point, how much you will need to ‘bridge the gap’ between stopping or cutting down on work and SPA, this all depends on your outgoings.

I found meaningful money community very helpful when trying to grapple with something similar. I started a SIPP with Vanguard using a multi index fund for tax benefits and low fees.

First step is getting your head around the NHS pension.

If you have any in the 1995 section you can (and should) take that 60. If any is in the 2008 you can take that at 65, but unlike the 1995 it will increase (a bit) if you delay taking it.

If you have some in either of the above, do you qualify for the McCloud remedy? If so you'll need to work out which option is most advantageous.

The pension age for the 2015 can be bought down by 1, 2 or 3 years by paying the ERRBO premium. But that only buys down the years accrued while paying the premium. So if you start paying before June this year, it will apply to this year's contributions onwards, but the pension you've already built up will be redirected for taking it early.

Forget property. Not much profit in it these days.

The minimum age to draw on a private pension will be 58.for you, I think. It's going up to 57 shortly but I believe the plan is for it to track 10 years below state pension age. So you probably want the bulk of your bridge in a pension (SIPP or AVCs) but you'll need some in an ISA.

This .
You don’t need an advisor dipping into your savings whether that’s through initial charges or a %of your fund growth .
Keep it simple and do a bit of research , meaningful money fb page and podcasts have been invaluable to me . Vanguard is very popular for SIPPS but I don’t know if they are the cheapest for platform fees if you have a small pot , check out interactive investor aswell.

If op only has a NHS (DB) pension and is under 50 she won't qualify for a pension wise appointment. The Moneyhelper website is really useful though, it has a pension calculator to work out how much you need to pay in to get what you need at retirement and many other planning tools and useful information.

Also look at the pengage NHS and public sector pensions page on Facebook. They run some free webinars where they explain in detail the different scheme and retirement and early retirement options

I’d second looking into an ERRBO if you are continuing to work in the NHS and pay into the pension. It can’t be back dated but as the current pension scheme is from 2022, you’ve only missed a few years.

Look at opening a stock and shares Lifetime ISA before you turn 40. 39 is the cut off age. Even just add £1 to it so you have the option to add to it later once you understand more about investing. You get the same tax relief as a pension but it’s not taxed when you access it so can be used to reduce tax in retirement.