Can anyone explain my NHS pension figures? I just don’t understand it.

[WantingToEducate]

Hi all,

I have recently posted about me leaving my NHS job and trying to find out what happens with my pension.

I have since been in touch with my Trust’s Pension department who have sent me an 8 page document about all the NHS jobs I’ve had over the last 17 years and there are numbers everywhere and I just don’t understand it.

I have attached a page that has really confused me….

1. What are pensionable earnings?

2. Why are my pensionable earnings decreasing even though my salary has been increasing?

3. What are the “pension earned” amounts ? Where have those numbers been plucked from?

About £100 a month would come out my
pay packet each month to contribute to my pension, so why are the figures only around the £400 mark? Especially as the NHS pays 14% of our monthly pay into the pension too.

I’m just so confused.

I’ve already left the Trust so I can’t access any of my pay slips (they are sent to us electronically) so I have no way of calculating exactly what my annual pension contributions were….although I know they were definitely more than £400!

I’m feeling so stressed 😢

And what on earth is revaluation?!

@WantingToEducate
But if approx £1200 (minimum) of my pay each year is put into my pension why is it only giving figures of approximately £400?

That's £400 per year for the rest of your life after retirement! If you survive 4 or more years after retirement you are making a massive,enormous profit. Chances are you will have 10-15 years worth at least unless you are very unlucky. The point with a pension is that the risk is pooled - the funds of the unfortunates who toddle off after 2 or 3 years and who don't make a profit are supposed to be enough to fund the pensions of the rare cases who live for 20 or 30 years. The reason so many pension funds are in trouble is that living for 20 or 30 years past retirement isn't that rare any more - but that is not your problem, they made a commitment to you when they made thise deductions.

So let's say in 2023 you accrued £400 of pension and made contributions of £1200. For simplicity, let's say you only worked that year.

You then retire in 2043. Forget about inflation and all the rest.

So you paid in £1200.

In 2043 you get £400.
Then in 2044 you get another £400.
And in 2045 another £400.

Now you've broken even on your own contributions, but you live another, say, 17 years!

It's a really generous pension.

Is that the figure OP will then get paid annually (adjusted for inflation)?

Ballpark, yes.

Good morning everyone,

Thank you to all the posts I’ve had.

I found my Total Reward Statement but there’s only information for the 2021/2022 financial year that I can see.

If you can log on to your TRS on the website, you might find that there’s another tab - 1995 or 2008? Which gives details of another bit of your pension. It’s very confusing!

Yes it’s very confused…..

So if, as an average, £5’000 my pension contribution last year (between my employer’s contributions and my contributions) how does this relate to the approx £450 amount that is classed as my pension earned that year??

If we used the 2020-21 numbers as a guide, and £5000 worth of contributions had been added each year for all 17 years of my career so far, that’s a total of £85’000.

So if the total pension contributions are £85k, why am I only entitled to £450 a year once I retire?

Surely the NHS pension is better than £40 a week?!

Am I missing something?

Its giving me a headache 🤷‍♀️😬

Thanks for the tip with the Tabs, I will go and have a look.

Im having to do all this off my mobile phone device so the format is a lot smaller so maybe there’s pieces I’m not seeing.

You’re confusing totals and annual figures now.

the £400 is the pension you have purchased each year. They get added together when you retire. So if there is £400 purchased per year for 20 years, on retirement that’s £400x20 = £8000 pension per year.

you’re in 2 schemes so you’ll have 2 of these calculations.

it’s an unbelievably good scheme but you have to stop thinking that it’s like a savings account.

Ok so a few things going on here.

Very very broadly, it's £400 in respect of each year of service, so approx £6800 per annum every year for life (400 X 17). If you live 20 years after retirement, that's £136k in total. (These figures are very broad brush, you can see the figure in respect of each year of earnings in the previous screenshot you posted last night. Your pension will then increase in line with inflation.) In addition, there will also be a pension for your spouse if you predecease them.

As someone else explained, you don't have the kind of pension where your contributions (from you and your employer) go into a pot that's just for you, the scheme is funded as a whole. So the scheme actuary figures out what it will cost to provide you with a pension of £x per annum for life, allowing for future inflation, your uncertain life expectancy and future investment returns. They do this for everyone in the scheme and then figure out what proportion of salaries that is on average. Then you pay an agreed y% of your salary and your employer pays the balance.

The employer may also be paying extra in respect of any deficit in the scheme but I don't know enough about NHS pensions to know if that applies.

That £8000 a year could be paid to you for 30 years or more.

it’s a bargain.

Don't forget that you will be receiving the state pension as well as the pension you will get from the NHS, assuming you don't retire earlier than state pension retirement age.

Yup. This former pensions actuary would sell her firstborn into slavery for a pension like that

So as my 2023 pension contribution is £462, my current pension is l:

£462 x 17 years of work = £7’854 per year.

Is that correct?

Can't you contact your pension administrators and just ask for a pension statement where it gives you a forecast of what your pension will be at Normal retiring date? I understand a bit out of pensions but those figures on their own have baffled me too? How old are you?

You would need to add up all of the figures in the column you got the 462 from. Because your salary varies quite a bit, so does the amount of pension.

If your salary hadn't changed, then yes that's what it would be.

I’m 39 and have worked in the NHS for 17 years.

Mind you, even before I worked as a nurse I had an 18 month period of being an NHS Dental Nurse, and whilst I was doing my Degree I did a 12 month stint of working as a Health Care Assistant through a nursing agency.

Should those jobs be taken into account as well?

As you are only 39 those figures will be adjusted each year until you retire depending on the schemes terms and conditions so hopefully you will get more than that.

Why do I need to add them up? What would that total mean in relation to my pension?

Would it be that I’d add up my columns and then work out the average, and it is that amount that would be used to calculate my pension?

Ring the helpline for your pension or get a meeting with the advisor to talk this through. Go to the official NHS pensions helpline. Beware of other ‘advisors’ as there is a risk of people scamming you to get your money.
You will probably find that your nhs pension will give you more benefits for your money than most other pensions because your employer makes a generous contribution to it. So try not to worry too much, I agree these things are rather confusing.
There should be a booklet or similar which explains how the numbers work in general. You seem to be imagining it’s like a savings pot which it isn’t. You pay in and contribute for a number of years. Then on retirement those facts are used in a type of sum or calculation to provide you with your annual pension.
Also are you in a trades union? Your Union can probably explain the pension benefits to you.

I don’t plan to return to the NHS after leaving this job.

If you worked for an agency that may not have included a pension. They should have told you when you left as to whether there was any pension to be taken at a later date. I don't suppose you still have payslips showing whether there were pension deductions. You can write to the HR departments to check.

It doesn't matter whether you plan to return. You can't draw on it until your normal retiring date but most schemes even if you leave have some sort of inflation provision.

Let's pretend you'd only worked the past three years. Then your total pension would be 462 + 449 + 448 = 1359 per annum. No need to do any averaging. It would then increase in line with inflation (likely subject to certain constraints) until you retire, and increase each year once in payment.

To confuse matters, it's likely your pension had a different structure when your started (final salary rather than career averaged) and so the early years of your pension may work differently.

If you want an exact annual figure, contact the administrators.

This was about 18-19 years ago.

To be honest I’m so overwhelmed by just working all this out based on my nursing career I don’t think I have the head space to start worrying about my other jobs too 😂

No you don't average them. You add them up and the total gives you your annual pension.