NHS pension disappointment.

[Stillearninglife]

After 33 years in the NHS I have been battling with pensions as they “lost” years and years of my pension due to “clerical errors “.
Now I have a prediction which I intend on taking at 55.

Seemingly one of the best pensions around, reading of other people’s pensions, it is utterly crap.

33 years with a lump sum of less than £80k then monthly payments of less than £800 per month is so low. All those years at B7 diligently paying in thinking I will be ok financially and it’s just dire.

I left the NHS due to conditions and pay some time ago (2 years ago) so nothing is going into the pot, so I’m taking it at 55 next year.

Anyone had similar experience with NHS pension?

….worth knowing though that there isn’t a minimum number of hours you need to be working to keep SCS. Go and do some NHS bank work in the run up to turning 55.

The pension age for the 1995 is 60. No benefit to waiting longer- there are no late retirement factors in that section. And you cannot take the lump sum separately from the monthly pension.

I thought the main advantage of the earlier schemes was they were based on final salary ?

Although I take your point on accrual rates, it seems improbable that the scheme as a whole would have been made more generous during the coalition Government and ‘Austerity’ years.

But I could be wrong and perhaps Osborne wasn’t so bad after all ! somebody should tell the BMA 🙂

If you are on facebook, I recommend you look for Pengage. Laura is a public sector pensions specialist. She gives general advice for free but can be engaged privately. She is amazing. I really recommend you run these things by her. We did and she pointed out where the pensions team were wrong and gave us the knowledge to challenge NHS pensions.

As a B7 nurse myself with a retirement age of 68 your pension is looking much more favourable than mine.
Shoved into the 2015 scheme by Jeremy hunt and now I’m back for some (not all) of the 1995 pension
I think my lump some is about £20k with approx £500 a month based on the current prediction

There is now way you paid £900 a month into the NHS pension unless you want a he'll of a lot that month, have an AVC or were making up for lost years.

I haven't read the full thread bid I'm guessing you special status for reductions is no longer valid hence there will be a reduction for taking it early.

NHS is DB pension so isn't calculated by having a pot of money, it's based on salary, length of service and accural rates (plus some other factors). The amount of lump sum you take can also impact the yearly income.

Be careful when taking a pension at age 55 as if your still working it can have tax implications for how much you can pay into a n9n claimed pensions - you'd be subject to MPAA

Special class only applies if you are still in a qualifying post at age 55yrs. You lost Special class status when you left the nhs.

You won’t be contributing but the pension itself will grow with inflation. I’m a teacher and those who leave the teaching profession early have the same. Their pension sits there not getting any more contributions but does grow with inflation.

Also don’t need the lump sum now? Wouldn’t make a different to take a smaller one. My teacher pension can vary depending on how much lump sum you take.

I just checked the SC documents and I am worried about your position:

Were you made redundant? It may be that leaving 2 years ago will cancel out your SC entitlement (or any perceived 5+ year gaps in your pension record)

Guidance says

In order to retire at age 55 a member must have spent the whole of the last five years pensionable employment in a health service scheme as a member of the special classes. This does not need to be continuous i.e. breaks in NHS employment will not be counted when assessing the five year period.
A member must be in a SC post immediately prior to retirement. When a member leaves pensionable employment before age 55 benefits become deferred and do not become payable until the Normal Pension Age of 60.
Redundancy - An exception to this is a SC member who is made redundant and is not in receipt of a redundancy pension. In these circumstances a member with deferred benefits may claim these benefits at age 55 if the last 5 years of pensionable employment was as a member of the SC.

Info is here:
https://www.nhsbsa.nhs.uk/sites/default/files/2018-10/Special%20Class%20Guide-20181080-%28V1%29.pdf

Gawd I wish people would RTFT before commenting!
It's getting painful now

@Hayley1256 I don't think MPAA applies as 1995 section is a final salary scheme not career average

And you haven’t worked for two years - so you are missing 14 years of highest earning period

Thanks again everyone (except for the person saying that im fleecing the tax payer…. WTACTUALF!)

I understand that as I left 2 years ago I am no longer SCS. There is a job freeze at my local hospital so can’t get a bench contract to remedy this.

The only reason I began to look into claiming my pension so early is my current (non NHS) job is so unstable and can end at any time. Having the financial buffer means the panic of unemployment is reduced somewhat.

I have worked incredibly hard for my whole adult life. It has not been for the faint hearted and have always held the belief that paying into the NHS pension will secure my finances in later life.

No, not complaining at all, I am very fortunate to have made sound decisions and it’s been a wild ride to even get to this point in the process.

Shocked by the odd vicious comments, but mostly, sincerely, amazing advice, facts and guidance, so again, a huge thank you x

@Stillearninglife
Your NHS pension is lower than you hoped because if you retire at 55 that is 8 years before your state pension retirement age. With some final salary pensions you lose about 5% for each year taken before the scheme’s retirement age. Some of your pension would be due at 60 and some at 65, no doubt. Retiring at 55 will cost you, I’m afraid.

I was lucky enough to retire from NHS at 55 as a nurse on the 95 scheme,with ‘special classes’ was able to take my full pension. I worked as a nurse for 33 years too but only had 25 years full time equivalent. I opted for the standard lump sum rather than the maximum so got 50k but my pension was £1400p/m initially. Now 4 years later it is £1750 with inflationary rises pre tax.
are you in the 95 scheme? Taking pension early? (as that will have a huge effect), taking max lump sum which means you get a smaller pension. How many full time equivalent years have you accrued? If you worked part time for a lot of those years it could be a lot less than 33.

No, not complaining at all, I am very fortunate to have made sound decisions and it’s been a wild ride to even get to this point in the process.

What is this thread if not a complaint?!

Seemingly one of the best pensions around, reading of other people’s pensions, it is utterly crap.
33 years with a lump sum of less than £80k then monthly payments of less than £800 per month is so low. All those years at B7 diligently paying in thinking I will be ok financially and it’s just dire.

Only, OP left the NHS so, as I understand it and may be wrong?, OP doesn’t qualify to take at 55 without penalties, so holding off would actually be beneficial.

I will have the same issue in the CS when I reach 55. Only I’ll be doing reduced hours, not retirement until I can retire for the gold plated beauty!

@Stillearninglife I see you are considering taking your pension early due to instability with your current role. Unless you need the lump sum especially in the near future, it may we worth considering not claiming your pension until your fear of being unemployed comes to fruition. If you can, make sure you have enough savings to keep you going after possibly loosing your job and waiting for your pension application to go through.

Having an income and pension could put you in a higher tax band, but of course 60% of something is better than nothing. Having a large lump sum, may also exclude you from certain benefits if you do loose your job - that will depend on the household set up and any current savings you have.

There are two main schools of thought on when to take your pension as a deferred member; take it early with reduction or wait until NPA and get the full amount. Neither is right or wrong.

I was a deferred member and decided to wait until I was 60 before claiming my pension. I chose that option after taking into account a lot of factors including our household income at the time, did I need the money then, size of pension at reduced and full value. For me it was right to wait, but overall I would not have lost out by taking it early until I got into my early 80s. After working things through, a friend decided to take theirs at 58. Both of us did what was right for our individual circumstances.

You don’t have to take both parts of your pension at the same time. You could leave 2015 until you get closer to state pension age, but claim your 95 before or at 60. You could also play around with your lump sum for 95. You don’t have to take the minimum or maximum lump sum, you could take an amount between (which is what I did). I didn’t need the lump sum to pay of mortgage, go travelling etc etc, but I did want a title more than the minimum. Part of that decision making was also around how much income I would need in the future to meet my outgoings. This is where financial planning and understanding your pension is so important.

I would strongly advise that you sign up for one of the Pen-gage free workshops. You have nothing to loose than a small amount of your time. The worst case scenario is you learn nothing new, but given you were not aware of loosing SCS, there may be other things you can learn including understanding your pension statements etc (lots of people have issues with these).

I will also echo what I said previously about using a financial advisor who does understand the NHS pension schemes. If you use someone who doesn’t, the advice could be very, very wrong. I have heard of some awful mess ups due to people following advice from an IFA who did not understand NHS pensions.

Good luck with whatever you eventually choose to do.

Yes, she has. Which is why I said 60, not.55.

You don’t have to take both parts of your pension at the same time. You could leave 2015 until you get closer to state pension age, but claim your 95 before or at 60. You could also play around with your lump sum for 95. You don’t have to take the minimum or maximum lump sum, you could take an amount between (which is what I did). I didn’t need the lump sum to pay of mortgage, go travelling etc etc, but I did want a title more than the minimum. Part of that decision making was also around how much income I would need in the future to meet my outgoings. This is where financial planning and understanding your pension is so important.

Yes that is what my DH did. He has taken his up to 2015 in the '95 scheme and is still working full-time.

Taking your pension early isn't necessarily bad yes it is reduced but you have the money now!

More than that to buy a £10k pa annuity, index linked for life from age 55. A lot more.
ETA: oh yeah, plus the £80k lump sum

Yes - I just had a quick look at an annuity calculator, and to get the same annuity and lump sum from a private pension pot would cost around £514,000.

And that's a single life annuity, unlike the NHS one there would be no benefits for a surviving partner. If you wanted that as well it would add another £50k or so.

Annuities are a rip off though. If OP lives until she is 85 and used savings at 800 a month she would need £288,000 in a high interest account. Probably a bit more if you take into account inflation might be a bit higher than interest rates but still unlikely to be as high as £514,000.

Op hopefully won't have any pension in the 2015 section, and it will all be in the final salary.
She left the nhs in 2022, so can have the 2015- 2022 years in the 1995 section too.

Plus an £80k lump sum. Plus death benefits for life for your survivor. Plus guaranteed for life, not just for 30 years.