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?!

Please can any of you experts tell me when I may be able to claim my NHS pension. I worked in the NHS form 1986 to 2018 with a few gaps to go to Uni, work abroad etc. In 2018 I left the NHS but did do another short stint in a job in 2019 which allowed me to rejoin the scheme. that job was only for 6 months though. I'm 55 now and in a non NHS job. When would I be able to access my NHS pension and lump sum please ? I'm hoping it's 60 so I can semi-retire. I have sent off for an Pension forcast but is taking a long time to hear back.

I've not changed my name. I'm not the OP.

So it sounds like not paying in for 7 years could sisadvantage me? Perhaps I need to do a few bank hours a year in order to protect rhe pension I get at 67? How much difference might there be between cpi revaluation and the revaluation you get if you're still paying in? Thank you for your advice here. It's much clearer than what the NHS provide!

If you started working in 1986 then chances are you should be able to take a portion of your pension at 60. This would be the Normal Retirement (NR60)
This would usually include a lump sum and then an annual pension. As you also worked after 2015 in the NHS you would get the additional pension at state retirement age. You would also have your state pension at this point which at the moment is £203 per week.

I was out last night with some former colleagues from a Government Department.

We're nearly all post 50 and most are retired now. Some of the younger ones are still 'in harness' in or out of the Civil Service. They will have to work to 66 or 67 before claiming their full Civil Service pension but may also have frozen years in the retire at 60 'Classic' scheme.

They're all bright people but both the recently retired and those still working had either found it hard work establishing what their entitlements were or were ignorant of what might be there for them in ten or whatever years time. Ignorance of rights regarding the pre 2015 old scheme and taking stuff/lump sum at 60 is rife. And that's career people in it more or less since they left Full Time Education. Multiple jobs in the CS, other public sector roles and out in the 'real world' make if even more of a morass.

Like public legal education public financial education is a gaping hole and is more injurious to more people than the legal one!!

Thanks so much for this.

You can take it earlier than 60 if you wish. Assuming those early contributions have remained in the old scheme, you can take that portion of a pension any time from 50 onwards. There will be an actuarial reduction of course, but you can take it. I took mine at 57.

It may increase more than slightly some years. My old LGPS increased by 10% this year, which was nice.

Thanks. Do you know if this still applies even if I am no longer working in the NHS ?

Sorry, no I don't know. BTW if you have benefits on the old scheme and the newer schemes, I think the earliest you can take your old scheme pension is 55.

I'd urge everyone to read up on their pension schemes and makes sure they understand it. In house pension teams at trusts often hold drop in sessions or appointments. Everyone should go along and educate themselves. As I said, my pension was wrongly calculated by thousands a year. Even when I pointed the error out, NHS Pensions disagreed and closed my case. It was only because I knew they were wrong that I persisted and am now £3K a year better off as a result.

The pension accrued until 31/3/2022 in the 2015 scheme is shown as £4120.89. This would be uplifted by the revaluation figures given for each year. It would be 4120.89 x 104.6% (i.e. x1.046) in April 22, making it £4310.4 on 31/3/2023. The revaluation for 2023 is by 11.6% which uplifts it to £4810.46 by 31/3/24. The accrual for 22/23, 1/54th of the actual pay for 22/23 uplifted by 11.6% would be added to this figure. The accrual for 23/24 would also be added. (The revaluation is CPI +1.5 applied in April every year. The CPI for April 23 is 10.1, so, the revaluation is 11.6. CPI = consumer price index)

If you then leave NHS you also leave the NHS pension scheme, as it is not possible to contribute to it if not in NHS employment. The accrued pension (in both 2015 and the 1995 schemes) will, however, continue to be uplifted by CPI (without the 1.5% addition) every April. If the average CPI is 3%, in 28 years time it will have increased by 2.287 times. For example if the 2015 pension is £5600 in April 24 when you leave NHS, it will be £12,768 28 years later. (The calculations change if you rejoin depending on when you rejoin)

I don’t think people realise how much they would have to pay for a similar income if they weren’t in this type of pension scheme.
You would get approx. £4000 per year per £100000 of pension if you bought an annuity. This is age 60, joint life and 3% annual increase. This is only because annuity rates have risen a lot recently.

A guaranteed £10k pension would have a cetv of £300k . 30x cetv is considered average.
LGPS, for example, has a conversion rate of 12x , so very poor. If you were able to transfer ( 99% of people can’t these days, even if they want to) so your cetv would only be £120k, so you would have lost over half your income.
I don’t know what the NHS rate is but I doubt it’s much better.

Just wandering in to confuse you even more OP, by mentioning the McCloud judgement. Particularly since you mentioned poor health. Have a google as I'm not clever enough to explain it! It allows you to move some of your 2015 into the 1998 scheme, allowing you to take it at 60.

How are you getting on with making sense of it all now you've left your post OP?

Can you acces esr ? That should show you your annual amount for both the 1995 and 2015 pension. Both annual payments and lump sums. Both these are accessible at different ages and can be claimed earlier with deductions

it can be confusing does your trust or union offer any pension sessions or webinars?

there is a great NHS pension advice forum on Facebook that has all the nhs pensions fact sheets and you can ask questions on there

I don't want to set your mind spinning in a whole new direction.

You will receive an annual pension of £7-£8k for the 17 years you worked for the NHS, upgraded by inflation.

If you were staying in the NHS for another 28 years (assume an age of 67 for retirement) that would add another £12k or so to the pot, meaning a pension of £20k.

But you're not. The NHS pension is good money in the bank. What you need to think about is what type of pension scheme you will join for the 28 or so more years you have left to work. If this remains in the public sector, you will likely join another similar scheme. If this is in the private sector, you need to plan for yourself - your employer will have a scheme, but it may not be as good. I'd be directing my thinking down that road.