Giving up NHS pension

[Freshstarts249]

I’m relatively new to the NHS. I’m mid thirties and have zero pension elsewhere.
Im considering a new job opportunity but am suddenly very aware that my contributions into a normal pension pot for the next 30 years will leave me with next to nothing in retirement. Whereas if I stay in the nhs I’ll have a decent pension.

would I be crazy to leave? Or crazy to stay just for pension in 30 years when who knows what opportunities I could have before then?

All depends what your salary prospects and pension will be like in any new role. The NHS pension is defined benefit so 'safe' and index linked. If you'll be in a private sector role, it's likely to be defined contribution. You need to check how much the employers contributions will be in the non nhs role. Bear in mind you might not end up working for 30 years (Ill health etc). Too many variables really to advise.

The pensions forum on money saving expert is very good though on this sort of thing. There are people on there that can look at the calculations and give you a rough idea of what you'd need to contribute to match an NHS pension.

There’s no way I’d match the nhs pension. Salary is around 33k, minimum employer contributions. I guess I’d have to maybe consider going back into the NHS or local authority later down the line for the pension.

Your NHS pension is worth about 30% of your salary.

This. It’s crazy to leave unless you’re getting around a twenty percent pay rise since most private sector Employers pension contributions are around 6%

If I leave it’s for a job with an equal salary (for now at least) But I’m bored in my current job and have zero chance for progression. I can’t see me sticking that out for 30 years, just for a pension.

But yes, I’ll never match or come close to the nhs salary. It’s so hard.

I either stay and feel like I’m putting my life on hold just to have some money when I’m older. Or leave; enjoy my career possibly progress and potentially have nothing in old age.

Neither of my parents have pensions, just the state pension so it never occurred to me until recently.

You seem very negative about the pension in your potential new job. I don't know what the projection would be, but after thirty years it would be OK, surely, even with paying the minimum of 5% and the new employer 3%? Not as good as NHS, I know. I think life's too short not to (potentially) feel fulfilled at work, so I would leave and consider adding more to the new pension in the new job, or invest your spare money elsewhere.

If you're more excited by the new role that might mean you're more likely to progress up the ranks and increase your salary. So whereas at the moment I suppose to move to the same salary you're taking a pay cut (because of the drop in pension contributions from your employer) but if your salary increases so will your pension contributions.

Also once you're earning more you can increase your own contributions into your workplace pension to grow it.

It's a hard balance but I'd think very long and hard before staying in a job you don't enjoy for a pension that god forbid you may never get to take. And I say this as someone in the private sector who prioritises pension payments by salary sacrificing 30% of my salary into mine.

You seem to be thinking about this is a very black and white way - just leave and pay in extra to your new DC pension (this is what I'm currently doing), then try to progress in your new role.

Maybe I just don’t understand it very well but I thought on a 30-35k salary with 8% contributions it would amount to next to nothing

I’ve only just started learning so maybe I’m wrong but calculations seem to be saying I’d need to pay £600 per month on to come close to nhs pension. In reality it would be a quarter of that.

While it's very sensible to be thinking about the future and pensions etc, you can't stay in a job you're unhappy in for another 30 years just for the sake of more money in retirement.

The NHS pension is good but the trouble is, you may be sacrificing your health and mental health just by staying in there. So, great pension but too much of a wreck to enjoy it !

It’s a terrible place to work in my experience.

I suppose it depends on your job role though.

It would be roughly £15K a year if you're 37 now and want to retire at 67, based on a salary of £35K.

Can you not progress on the NHS? Perhaps a lateral move into something with more progression opportunity?

I'm part nhs, part private. My private income is 60% more than NHS but I put half of it into a personal pension. So I pay myself the same rate as the nhs.

So any pay rise you take in a new role, put it into the pension and live as you are until the pay rise outweighs the pension loss.

It will require some sums but it means you'll save on tax anyway.

My role is actually ok, not stressful, good team, easy. But I’m bored already and the lack of progression doesn’t sit well.

No I can’t really, I’m clinical but band 4 and no progression without going to uni for years which I’m not willing to do.

Why are contributions for 30 years amount to nothing; are you not thinking of progressing? Increasing your salary and your contributions later on?

You can not stay in a job for 30 years where you are unhappy just because of the pension. What if you don’t get to enjoy it. It would be soul destroying.

Just move and pay as much contributions as possible and focus on growing your career, increase pension contributions

I just thought, probably wrongly, that the contributions on my wage wouldn’t go far. Of course I’d love to progress and earn more, that’s the hope but it’s not easy as I have limited experience and qualifications.

I agree though, about possibly not getting to enjoy it later on due to ill health, or worse. Need to live for now and enjoy life.

Im Not actually unhappy in my job, but I’m not fulfilled and want the chance to learn and progress.

30 years contributions into a private / workplace defined contribution pension will amount to a decent pension!

There is your contribution, your employer’s contribution, then the Gvt adds 20% to compensate for the tax you paid on the contributions, and growth over time if the fund value.

As your income increases so will employers contribution and you might be able to afford to put more in in later years.

People who don’t work in the public sector manage to save big enough pensions!

It’s much much much harder to build a decent pension in the private sector.

“big enough” is a relative term. Private sector employers tend to pay about 5 percent. The effective contribution rate in the NHS is around 27 percent.

It's also worth pointing out that you can have as many private pensions as you want.

As a single person on an average wage who has no pension at the age I am, I just thought it was too little too late. Glad to hear maybe it isn’t.
Although I’ve just used an online calculator and on my current wage it’s predicting I can have 12k a year, if I take no lump sum, retire at 67 and only live until I’m 80 so not great.

You do realise you will get the state pension as well?

if you are band 4 clinical, is this an ahp role? Is an apprenticeship a possibility? Training as you earn then you can become band 5 and above whilst remaining in the nhs? https://www.hee.nhs.uk/sites/default/files/documents/An%20Introduction%20to%20AHP%20Apprenticeships.pdf

Hi OP, I'm 23 years in nhs and a director. The NHS is massive with so many roles, clinical and non- clinical at all sorts of bandings. Have you considered raising this issue with your line manager or in your appraisal to help map out a career plan? No one expects you to stay in the same role for 30 years. Theres also the NHS mentorship scheme, you can go on their website and find mentors who can help you with things like this.

Have you approached HR about on the job apprenticeship schemes or training programmes?

Your pension contributions also give you great life insurance. In nhs you also get good sickness benefits and generous annual leave.

What do you do and what would you like to do in NHS?