NHS pension advice needed

[Supermum222]

Hi,

I am so confused over the NHS pension changes. I know we pay more and that, from April 15, the final salary pension will end and pensions will be based on career average earnings but will this mean any earnings before April 15 will be protected? I read on here somewhere that you will still get the years worked before April 15 based on your final salary at retirement. Is this true?

Bit of history:

I am 42 this year and have 18 years NHS service. The first 9 years I was full time, the last 9 years I have been part time (0.6 WTE) after 2 children arrived. I am now in a position to increase my hours.

If I was to go full time in the future (I have the chance to where I am now and a full time post has come up at my previous hospital), so that my final salary was full time (top band 6), would that first 18 years be based on final salary so, effectively, it would look like I had worked full time the whole time? If so, this would make a huge difference to my pension. I had thought that my part time years would seriously damage my pension, even if I went full time now, but it appears that they won't as they are pre-April 15.

Anyone know? Sorry of this post has confused you.

Your part time years will have affected your pension.

Your pension (final salary or average earnings) are based on the number of years if pension payment you accrue. If you are on a 0.6 FTE working pattern, the for every calendar year you pay in, you will accrue 0.6 years of pension.

So for you, you will have accrued (1 x number of full time years before Apr 15) + (0.6 x number of part time years before Apr 15) years in your final salary scheme. The amount this will pay out depends on the terms of your final salary pension, but is probably 1/80 or 1/60 of your final salary for each of your accrued years.

Then calculate the average salary bit seperately. To make it simpler, you can just average the annual pro-rata salaries during the post-Apr15 part of your career an then multiply it by whatever term your pension states (1/80 or 1/60 or whatever).

Good luck!

Thanks. It is so confusing so I a, grateful for the help.

You can ask for a pension forecast I think.

your best bet is to talk to your local pensions team as they have all the numbers in their software

basically the advice is to STAY IN
and only high fliers are being hit by the changes
most part time workers will be better off

Try looking here for further information.

www.nhsbsa.nhs.uk/Pensions/4017.aspx

I have just been having a rant tonight as I'm now potentially looking at a retirement age of 66 rather than 60 as the 2015 scheme links with state retirement age.

www.nhsbsa.nhs.uk/Pensions/4017.aspx

Clicky link!

Hi,

Thanks Polly, I will take a look at that link.
I actually did a bit of messing about on the NHS pensions calculator the other night. I don't know how accurate it is but I was shocked!
If I was to retire now (say I was 60) on the same salary I would go with double the yearly pension and 3 times the lump sum. I feel mad that I have to work until 67 to get only half of someone retiring today (top band 6). I based these on full time working too.
So, we are paying more for longer and getting a lot less. So bad. It looks as if I may have to return full time if I want to eat when I am past 67. Or, win the lottery.

I keep meaning to look into additional voluntary contributions (AVCs) to my NHS pension as I have no idea whether I could afford to buy some extra years, but it would make a big difference to me. Worth finding out.

Oh, I am going to contact my pensions team next week and get them to give me a few breakdowns based on different scenarios (part time vs full time). When I did it I only got around £3000 a year difference between my part time hours and full time hours.

I had a word with someone at my workplace who is 59 now. She also worked part time (band 6) for a number of years before working full time as a band 7. I asked her about paying AVC's for the 9 years I have been part time for but she said it isn't worth it.
I guess this is a question for the pensions team.
My mortgage finishes in 3 years and I figured, if I went full time, I would have plenty to invest elsewhere. I just don't know the best way of doing it.
We can only pay into the NHS pension for 40 years so most of us will have more than 40 years in the NHS of we have to work until 66/67. And there is talk they will increase the age to 68 :-(

supermum
sadly you are caught in the trap
salary related pensions were invented in the 1910's
after WW2 the baby boomers did a great job of getting benefits improved
based on 1950's life expectancy
unfortunately, as life expectancy improved, there was not a gradual commensurate cut in pension incomes
the shit hit the fan in private companies in the early 90's
I was auditing the Hampshire LGPS at that time and it had a deficit brewing that was nasty
but the can was kicked down the road by politicians
BLIAR AND BROON bear particular and significant responsibility for shitting on workers for 13 years, leaving the way open for Tory cuts

come 2008
the can stuck in place and the cuts are being made
back to what was ever, ever affordable
sadly

I am working full time after a number of years part time, so the next few years would have really made a difference to my pension. I'm in the 1995 scheme, so my retirement age under that scheme is 60. At my last forecast a year ago, which was a year out of date, due to having worked part time, I had only accrued the equivalent of 5 years full time of benefits and would have got a pension of just over £2,000 a year! (Should now be 7).

I did look at buying additional pension, but it seemed to be an awful lot of money for not a great return. It may now be worth looking at this again.

I will have to go through the Choice exercise again with option of transferring those benefits to the 2008 scheme with a retirement age of 65. From my reading of the proposed new rules, if I stay in the 1995 scheme and collect my pension benefits at 60 from that scheme, I will not be able to make anymore payments into the 2015 scheme (assuming that I am still working in the NHS post 60).

Given that my husband is much older than me and has retired already I may not be in a position to work beyond 60 unless he is in a care home or dead. I feel somewhat screwed over at the moment.

just seen the proposals for 2015 pension scheme.I find it quite hard to follow but as I do not come under the protected period I am 16 years away from 60yrs I automatically am enrolled on to the new scheme.
I find it strange as half my pension if I go at 60 yrs old will be on old scheme and quite a small amount so if I want to carry on to get the rest of my pension to 65 I can't continue to add to my pension pot which seems unfair but could if I go for the 2008 pension scheme.
It seems they are trying to down grade the 1995scheme in my eyes.
Could some one give me advice what's best to do as I am thinking about retiring at 56-58 and then going locum for the last few years.
Shall I stay in 1995 scheme or transfer into 2008?I personally think I will keep with 1995.

www.nhsbsa.nhs.uk/Pensions/4640.aspx

This link gives details regarding the choice including a decision tree download that allows you to see whether you're likely to benefit from changing schemes. Everyone should have had the letter from NHS Pensions by now.
Roughly speaking, if you intend to retire before 62, then the 1995 scheme is better. From 62-64, then it's a bit more tricky, after 64, then the 2008 scheme may well be better. I took Independent Financial Advice. It's too important a decision not to consider very carefully. I hope you've either made your decision or are close to doing so-'not much time now....

Have you had a look on your Total Reward Statement? I found mine to be quite useful and interesting.

I have just had a letter saying I need to decide soon whether to move to the new scheme. I don't have a clue what to do. I am 47, work part ime (0.6fte) and have a lot of gaps in my NHS service, as I went abroad for 4.5 years, left to fo a fulltime degree for 3 years and have been very part time for a few years now. I need to look into whether I can buy any extra years also. I read the info they sent but just can't seem to make much sense of what would be best for me.

I haven't looked into it thoroughly yet but my gut feeling is that as we are being encouraged to switch our existing pension from the 1995 scheme, it can't be in our best interest to do so!

That's exactly what my cynical self thought too Annie !

That's exactly what I thought too.

I've just been in a similar situation so I called the NHS pensions people and they were really helpful. They told me how to set up an account for the Total Rewards System online, and that tells me how my pension stands now and its updated each month. They told me you can't buy back missed years anymore, thats been stopped. I'm on the 95 scheme, and have a total of 18 yrs contributions, having worked part time for many years. However increasing your hours/band now will increase your total pot when you do eventually retire. The site is really helpful, allows you to see your various options re lump sums etc.

Thanks looby - that sounds useful

I will take a look at that site Looby. Thanks.

Hi,

I am also having to make choice 2 (not much time now!). I am only 36 but have a neurological illness which means that I am likely to retire due to ill health before the age of 60. Does anyone know how it works when you retire due to ill health and how that will affect the choice? My understanding is the 2008 is better in this instance but I could be wrong. Finding it difficult to get advice from people who actually know the NHS pension scheme!