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?

I suppose everybody tends to flip to their own set of circumstances. It seems a lot to me?

Your lump sum sounds quite good (compared to the ones in teaching). Just be careful if you are working now in industry as you could get taxed on the monthly payments if you go over a certain salary.

There must be a Facebook page like there is for teachers.

Do you have the option for lower lump sum & higher monthly payments?

A band 7 when op left was 40-45k per year. Not much money for the role and the responsibilities. The pay still isn't great. Op will have paid between 9.3%- 12.5% into her pension for years. It hasn't been 5% for a very long time (for qualified staff). I can see why she is disappointed.

OP do you know if the £800 pm is before or after tax? You say you have another job, so you’ll be paying a lot of tax on the pension at the moment.

@Stillearninglife what's your actual pension age in the scheme(s) you're in?

Taking it at 55 is going to involve a significant actuarial reduction.

OP, I would join the Facebook NHS pensions group, they are very knowledgeable.
A couple of points:
If you leave the 'pot' (which is not really a pot as others have said), it will NOT increase with deferred years - the NHS scheme doesn't work like that.

You are unlikely to have had the full 33 years in the 95 scheme if you are 55 - everyone was moved over to 2015 scheme in 2015 and then there was a court challenge which resulted in the McCloud judgement which allowed some 'roll back' up to 2022 dependant on age so as not to disadvantage people. So it's likely you have some in the 2015 scheme which is career average not final salary. The portion in the 2015 scheme will be actuarily reduced as normal pension age for that scheme is 67

Hopefully you have tracked the 'lost' years - check your TRS carefully

This doesn't seem correct on basic math. The top of band 7 in 2023 was 50k ish. The 1995 scheme uses the best of your last 3 years as final salary. You get one 80th of your final salary for every year 50,000/80 is 625 and that times 33 is 20.6k and your lump sum should be 3 times the pension so 61k? Did you not get a breakdown of how they have calculated your figures.

If you paid £900 a month in you must have been topping up, in some way? Were you overpaying or buying years?

no no no no no no!!

If you leave it till 60 it'll be way more. If you leave it till 65, even more.

I'm same as you. Haven't paid into my pension with the Bank for years, as I left in 2013. I am 55 now and would get £800pm and £67k lump sum, if I took it now. I'm waiting until I'm 58, by which time it will pat £1000pm and £83k lump sum. (I'm taking it when DH takes his)

Can't you get into the calculator for it? It's how I know all my projections. If I left mine till 65, the lump sum is £125k!

As a rule of thumb, a DB pension scheme should pay half to two thirds of yiurnfinal salary at retirement age. If your pension is protected from an actuarial reduction due to early retirement, then the figure yiu quote based on an annual salary of c£50k seems too low, notwithstanding the high lump sum. I don't understand why not taking the lump sum would extrapolate only to £100pcm difference.

Kindly @Stillearninglife this is about your future and yiur retirement. You desperately need some good independent financial advice. I think £1000 is cheap at the price and that you should take that advice. Nobody here is likely to be able to advise you. You need someone who understands the NHS pension.

The only thing I can add, is that whilst your overall pension is protected by the clause you mention, there may still be an actuarial reduction for accessing it early.

I’m really sorry, but I found this. It suggests that only contributions in the 1995 pot of the pension are subject to special class status. Speak to your FA/NHS pensions whether this means that your 2008 and 2015 section are being actuarially reduced.

If you have the savings/other income, are you able to survive 5 years by just taking the 1995 section now and wait to take the rest?

You’re retiring ten years below normal retirement age. There is a hefty penalty for that. It’s a pretty decent pension as you’re getting it paid to you for a decade longer than those who retire “on time”.

It does seem low, I worked for 10 years B6, 3 days a week and my pension will be around 7k a year.

I won’t claim to know anything about the NHS pension because I don’t. I only know about two that I have.

while I left one company many years ago, only worked there 4 years, so no longer contributing, it is not a case that it is “frozen” and not growing.

I recently cashed it in with the advice of professional independent advisor and reinvested it, but some also used for home improvement. Some is still sitting in another retirement investment account so funds are moved or cashed in most tax efficient manner.

have you used an independent financial advisor to get professional advice on what options you have about crystal using your nhs pension, taking it out at 55 and what / where to invest it once you do that?

You are woefully misunderstanding how the NHS pension works. Presumably with 33 yrs service you have funds in the 1995 and 2015 schemes. Taking either before pension age (60 and 67 respectively) will reduce them a lot. It doesn’t matter that you aren’t adding to them from now, the benefits are calculated on the assumption you take them from the permitted retirement age and for every year before then you decide to take them they get reduced.

Depending which nhs pension scheme she was in and whether she has "special class" status she's not taking it early so there shouldn't be any penalty for taking it at 55. If however she doesn't have special class status there will be. I'm not sure if nurses had that, I know midwives did (it's defunct now anyway for new people but plenty of people I know got it).

All those saying if she leaves it longer then she will get more money are completely wrong.

She has special class status so the pension will be the same amount whether she takes it at 55 or 60 or higher.

By NOT taking it at 55 she will lose thousands as she cannot accrue any more benefits in that part of the pension scheme.

OP I think you are a bit naive to what voters will be getting from their pensions when they retire.

OP not sure if it has already been posted but this is helpful

www.nhsbsa.nhs.uk/sites/default/files/2019-08/Early%20Retirement%20factsheet%20%2805.2017%29%20V3.pdf

ONS shows the average life expectancy of a 55 year old woman to be 87, with a 1 in 4 chance of living to 95 and a 10% chance of living to 99. Unless you have a condition which is likely to give you a limited life expectancy it may be wise to consider inverse commutation, not taking a lump sum or reducing the lump sum in exchange for increased pension payments.

There si a very good fb group - nhs pensions chat: member led discussion. Post on there for help.

Ok, really really going around in circles here.

I have SCS. Front line nurse for over 30 years. Therefore no reduction.

My monthly pension payments varied month by month depending on my shifts. Nights and days meant different pay, therefore it was never ever “set”, ever.

I am in the NHS pension FB page BUT anything they deem a repeat question they delete your question. Cannot find my question in the FAQ section.

I paid in a big chunk without overpaying, it’s just how much they took each month. It impacted financially as my pay wasn’t great.

I expected a bit more return, 33 years is a long time to contribute to securing a future with such low return. In my opinion.

Thanks all for your advice though, it’s been really great to look at the different aspects.

Totally wrong strategy. Leave it linger to normal pension age and it will be MUCH higher.

As an olde m3 scheme nurse she will have special status which made retirement age 55

No this isn’t how it works. The monthly payout is calculated based on WHEN you take it. There is no fixed pot. It is for life. So if you take it at 55 they calculate they will be paying you until some life expectancy date say 85 so they will calculate it for payouts for 30 years.
if you take it at 65 they will calculate it for payouts covering 20 years so the monthly payout will be bigger.

this is how pensions work. If you live longer than expectancy then you sort of ‘win’ as you’ll get the payments for longer than they calculated for. If you die at 70 then they sort of win as they will only have paid out for less than they calculated for.
Does this make sense? The lower monthly is because you are taking it so early.

SCS. No reduction at 55.