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?!

You know you can’t take it until you’re 68? or you can take a reduced amount from 58.

I think you can get the 1995 scheme from 50 at a reduced rate too.

Yes.

That depends on when you joined the scheme, or if you have 'protected minimum pension age' rights.

It's all so bloody complicated. I'd urge everyone to read up on their pension schemes, I don't want what happened to me to happen to anyone else.

I don't think so. Your contribution is obvs linked to the accrual rate but it's not the same. The more recent trs quotes show thr OP what OP will have in 1995 and 2015 schemes.

@WantingToEducate -

1 . Once upon a time, NHS pensions ( along with other Public Services Pensions) were paid as a percentage of your Final Salary either when you retired or if you left the service for good. That might have been 1/60th or 1/80th ( or a different figure) of your Final pensionable earnings for every year you were contributing to the pension scheme. So if you worked for them for 17 years you would receive 17/60th or 17/80th ( or whatever the percentage was) of your Final Pensionable earnings as your pension. Easy to calculate.

2 . Unfortunately, Final Salary schemes were too expensive, and they were all, or nearly all, changed. Exact dates of the changes vary between Pension Schemes. NOW you get what is called a Career Average. This is calculated in a different way and is worked out for every single year that you worked in the NEW pension scheme. This is also calculated on a percentage. So if you earn £20,000 in a particular year, you will have earned a pension of 20,000 / 54(say) = £370.37 in that Particular year. your total pension will then amount to the total of each individual year that has been calculated that way. So lets say you had 17 years and you earned exactly the same in all the years you were contributing to the pension scheme, your total pension would then be 17 (years) x 370.37 ( pension earned in each of those years = £6296.296 a year - for the rest of your life. You have the actual figures on the first document you posted, so you can simply add them up to see what that PART of your pension will be. (see 3. below)

3 . However, nothing is that straightforward unfortunately. You might see it as being ONE pension coming to you and it will be paid as one, but the rules applied will be different to the different elements of your payment. You will be able to draw part of that pension before the other part for example ( one has a normal retirement age of 60 and the other is 68). The other form you posted shows the amounts accrued in 2 different schemes. One was the pension scheme rules up to 2015 and shows what your pension will be for that part. The other is what you have earned in the new scheme up to 31/3/22. The scheme changed again from 1/4/22 so up to 31st March 2022 your yearly pension earned is £7471.6 - plus the £402.64 you earned to year ending 2023 (1st April)

4 . The Revaluation Rate will be applied UNTIL you leave the Pension Scheme or retire, so as you are leaving there will be some revaluing on what you have currently earned as a pension - but as you are leaving very shortly, that will stop and when it comes to pay out it will be only by CPI for the rest of the years until you retire

5 . Last, but MOST IMPORTANTLY. I would strongly suggest that you read up on your particular pension schemes so that you know what is what and understand exactly how they will work with regards to when you actually come to retire. It is really vital that you do understand, because the info above is basic, ball park figures. There are lots of other things to consider both now and in the future and it will benefit you greatly if you know what other things can impact your final pension. One of them being whether or not to transfer your NHS pension into a different pension scheme

Hope that helps

I am in the LGPS which works in a similar way, and would echo to READ UP ON IT - I think I'm in quite a good position, but not totally sure...

If you’re in LGPS then you are in an excellent position. It’s a brilliant pension with excellent benefits.

Re not having access to your payslips, they will still be on the Trust's system. Ask your helpful HR guy for copies of all your payslips and P60s for the time you worked there, should be no problem with him supplying these. Then keep them safe for future reference, you never know when you might need them.

As a cautionary tale, HMRC lost the NI contribution record of one of DH's client so she was told she wasn't entitled to any state pension when she retired. Several years after retirement DH had forced HMRC to find the records. She is now receiving her state pension and should shortly receive about £80k of arrears. All possible because she kept P60s going back to the beginning of her working life.

Payslips and P60s are really important documents. I don’t know why people don’t make sure they have them
when leaving an employer.

Also for future reference, most online payslip systems allow you to print off or download copies of your documents so you can keep these at home. Get into the habit of doing this every month.

“I have explained that I plan to leave the NHS once my resignation period is over in 3 weeks.”

Are you sure you still want to, now you’re starting to understand from our posts how bloody good your pension scheme is?!!!!

Don't jump into transferring your accrued NHS pension into a new employer's scheme without getting professional advice, it might be better left where it is

Are you going on to a new job?

I will do but not for another 6 months whilst I stabilise my health and I definitely wont be going back to nursing.

Can you log in to My ESR? It has all your pension stuff on including lump sums and predicted annual payments

I had logged into ESR and all that was on there was same information the guy I’d been emailing had sent me. I’d posted a few screen shots of it earlier on the thread where it showed how much money I had on each pension scheme.

I emailed him back and asked if he could give me specific information about my payments would be each year based on my current numbers and all he did was send me the same document again.

I think he was a bit sick of me emailing him.

I have looked on the page to find that information out on my own but I can’t find it anywhere. However, I’m only able to look at my ESR via my mobile phone so the format may be different.

I don't understand the reevaluation part. What happens to my 2015 scheme value if I take 1995 part at 60 and stop working but don't claim 2015 part until state retirement?

@WantingToEducate
The most recent screenshots you have put up show the following.

1st is what you accrued up to 2015 - This has Normal Pension age of 60 which means that you can take this from the age of 60 (you can see this at the top of the screenshot).
The amount that you will get at age 60 is £3350.71 PER YEAR For the rest of your life along with a lump sum of £10,052. The yearly pension will also increase a bit between now and then due to revaluation, think of this as increasing with inflation.
2nd is what you have built up since 2015. The Normal Pension age is 68 for this one and you would get the following additional pension.
£4120.81 PER YEAR for the rest of your life there is no lump sum on this. The amount on this would also be revalued each year to allow it to keep up with inflation. If you add the two together you get £7471.52 in total once you reach 68.
Don't forget that thsi will increase a bit each year with revaluation.

At the bottom of each calculation on the latest screenshots it shows you the Hypothetical annuity amount, which is the amount you would have to have saved in a normal Defined contribution pension to acheive the same amount of income from an annuity. (this is what most people that dont work in NHS, Local Government, Police, Civil Sevice etc have).

I cannot stress enough how good your pension is. DO NOT even think about trying to transfer the NHS pension to another scheme.

If you are no longer going to be nursing then I would be looking to try and stay in NHS in some capacity, admin, clerical, anthing you can. Failing that try and get into Local Government, in an office role, school etc as they have the same type of CARE pension scheme with an accrual rate of 1/49 which is even more generous than the NHS.

As you are only 39 now you have 29 more working years ahead of you to build further on the fantastic pension you have. If you don't stay in NHS or Local Government etc you will build a pension pot that you will use to either buy an annuity or use as drawdown but you will never acheive the kind of figures you can get with NHS, Local Government, Civil service etc.

Edit, on leaving the NHS the amount will increase by CPI instead of being revalued as it is now , will still increase slightly each year.

@WantingToEducate

I would agree generally with this statement from@rainbowunicorn

I cannot stress enough how good your pension is. DO NOT even think about trying to transfer the NHS pension to another scheme.

I said in my PP that it was something that you might be prompted to consider and gave it as an example of why you need to read up and make sure you understand how your pension scheme works sooner rather than later.

I would say that it is VERY, VERY unlikely for you to be better off my transferring your pension to another scheme except in exceptional circumstance and if you ever DO consider it, please do not take any action without consulting with a qualified expert in Pensions. The service up to 2015 has a brilliant pension attached to it and I cannot see that it would benefit you to transfer that part EVER, but as I say, without knowing all the details of both the pension schemes and your circumstances, I am not qualified to say for sure

Have you changed your name @literalviolence?

The 'reevaluation part' simply means that the yearly amounts of pension in the 2015 scheme will be increased in line with the percentage shown against that particular year - but only for as long as you continue to pay into the scheme. The rate payable will still be increased each year, after you leave, but only by CPI every year. This is to make sure that the pension you have earned keeps up with inflation so that in 29 years time whatever it is worth today should still pay for the same things in 29 years time. At least, that is the idea!

Pensionable earnings are basic pay

literalviolence · Today 10:54

I don't understand the reevaluation part. What happens to my 2015 scheme value if I take 1995 part at 60 and stop working but don't claim 2015 part until state retirement?

Should have said in my last post - the 2015 scheme pension will not be affected by any decision you make about taking your 1995 part earlier. They are in effect 2 different pensions - one pre-2015 and one after that date

Don’t forget that you will also receive a State Pension when you reach state pension age - it currently stands at £10k+ once you've paid in 35 years of contributions. You can check how many contributions youve paid here.
https://www.gov.uk/check-state-pension#:~:text=Applying%20online%20is%20the%20quickest,post%20the%20forecast%20to%20you