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?

Is the £80k taxed ? If not then it gives an additional £600 or so per month to state retirement age - more if you take interest into account, taking the monthly amount to £1400 which doesn’t seem too bad.

what is special status?

The fact is you're retiring at 55 compared to 67 (new age of state pension) and you stopped contributing at 53.

Yet you're still going to get close to £9K pa.

You've another 10 years ahead of you to work if you want to, save, and then will receive a state pension currently around £12Kpa.

Does the special status apply to all of it? Usually there’s a big reduction for going as early as 55. Ask for projections at 60 and 67 then you’ll be able to compare.

It's not just 800 a month though. The 80k is a big lump sum.

@Stillearninglife this post is worth paying attention to. Worth checking if the ‘no reductions’ applies to all of your pension or just the bit you accrued under the 95 scheme.

OP keeps explaining that isn't the case.

AHH Love, I feel your pain. I've done 35 years, mainly top of band 6 but with a smattering of 7 and 5 posts. I'll get £400 a month as most of my work post kids has been part time (but still around 27 hours a week. Thank goodness I get on ok with my DH as I'd starve without his much better pension.
It's so disheartening isn't it.

A member must be in a post that qualifies for SC status on the day they retire. If a member
leaves pensionable NHS employment or opts-out of membership before age 55 (or before
the date entitlement to an earlier retirement age becomes effective, if later), their retirement
benefits become deferred and do not become payable until the normal pension age of 60.

From the NHS factsheet on the 1995 scheme. If I am understanding it correctly, because OP left the NHS, her SC status is no longer valid and benefits become deferred until 60. Taking it at 55 is in essence taking it early, and so it is reduced.
OP, you need specialist advice on your exact circumstances.

So are you saying that NHS pensions have found the missing information? Also, by taking your pension early it will be reduced. I’m a teacher, taking a teacher pension early reduces it by around 4% a year. In the NHS, there’s a similar reduction depending on which scheme you’re in. If you’ve been given figures of £800 a month - ie £9600 a year taking it 5 years early, that’s pretty good.
If you’ve live to 85, taking your pension at 55, you’ll receive £288000 in total (without the annual increase). Taking it at 60 which by my reckoning would give you around £12k a year means you’d get £300000 by the age of 85. That’s an extra £12k in total or £480 a year over 25 years.
All in all, it’s pretty even between the two choices.

It does not look right to me because based on the publicly available information about the 1995 scheme, your benefits should be a yearly pension calculated as:

1/80 x your final salary for each year of service

and your lump sum should be 3 times your first years pension

From what you have said, you have 33 years of full-time (pensionable) service, and left 2 years ago at the top of band 8. Using a salary of £50000 as a guess, you should get a pension of about

33/80 x 50000 = 20,625 each year, or 1,720 each month.
with a lump sum of 3 x 20,625 = 61,875

Obvioysly you need to put the actual number of years and final salary from your statement into that calculation
.
Then there will be some inflation increase from the date you actually left the scheme to the date you want to retire, but before worrying about that you need to be happy that the calculations themselves are correct.

The numbers you have quoted are nothing like these. Some questions that spring to mind:

-Did you ask to increase your lump sum by giving up some pension - this might explain the low pension and relatively higher lump sum? they should still show the original amounts though and then explain the impact of giving up some pension to maximise your lump sum, if this is what you want to do.

-And I can't easily find the answer to this - I know you have protected status (I've read the thread!) But this protection applies to staff retiring from NHS service at 55 - their benefit will not be actuarially reduced from 55. Does this protection still apply if you have already left the NHS and are taking your deferred benefit from the scheme - I can't find a quick answer on that, hopefully someone will know. If it does not apply then your pension will be reduced for the years you take it before 60.

The statement that you have should have all of this information on it but pensions communications tend to be so poor it's easy to believe that's not the case.

It will increase with annual COL increases.

OP, Special Class in pensions only applies if you are still working at 55.

If not, your pension age becomes the 'normal' NHS 1995 section age of 60. As you are taking it at 55, you will be taking a massive actuarial reduction.

You shouldn't have lost any years, unless you worked for a GP surgery where they do often opt out.

I would really recommend that you get advice from Medifintech, which is one of the only independent advisors that will touch NHS Pension advice. They are excellent and will produce simple reports to explain all of this to you.

https://www.medifintech.co.uk/

You are understanding it correctly and a number of us have pointed this out, although OP had repeatedly stated that she does have SCS and her pension will not be reduced. But as she has lost SCS by no longer being a member of the NHS pension scheme, the normal pension age of the 95 scheme reverts to 60. Therefore if taking the pension at 55, it will be reduced, but it will be paid for longer. It is also reduced due to OP opting for the larger lump sum.

This is not correct as the OP would not have been in the 1995 scheme all the way through, she was band 7 not 8, and lost her special status by leaving at 53. No one here can calculate what her pension needs to be. She needs specialist advice. Though I do suspect the £800 PCM is correct as she retired early.

Do you have your payslips from 33 years ago?

Ah cross post with others about the special status. Ii seems OP you do not have special status because not in employment with the NHS. That would explain the low pension amount.
the forecast at age 60 should be quite a bit higher.

That's not how defined benefit pensions work. There is no "pot". They have to consider how many tears you will likely be getting paid, and reduce the annual amount you get accordingly if you reture very early.

If 55 is below the he normal end age is it being actuarially reduced because you are claiming it early? That can make a difference.

Of course noone can calculate her pension but it's clear OP has no idea how the components of her pension are determined so cannot even ballpark check the figures.

OP needs specialist advice but everyone reading this thread should try to understand how their pension benefits will be calculated well before they get to retirement.

Just for comparison. I've recently taken actuarily reduced voluntary retirement at 53. No special status but length of service means that I could take it at 55 so I've only 'lost' 2 years with the reduction. With mat leave and P/T hours taken into account the total length of service came to something like 18 years or thereabouts. Like you I had a forecast which showed that the benefit of deferring my 1995 scheme payments until highest pensionable age was minimal - higher lump sum yes but not much of a difference in the pension. And if you imagined banking the monthly payment for 12 years (until 65) it would make up for the difference in lump sum.
Anyway - that's what I did, I have another job now and my NHS pension is in payment. I got a lump sum of just over 50k and have a pension of about £712/ month. My salary probably comparable, many years at 8B. I've left my 2005 scheme as the forecast was tiny, since all the contributions to date have gone into 1995 scheme. I'll claim the £4 a month when I get to state pension age!!

Members with SC status can continue to keep their SC status in the 2015 Scheme but it only counts towards an earlier retirement age for benefits in the 1995 Section

This means later contributions are being reduced. You need to take advice

You absolutely would not have paid £900 in pension contributions! Currently, someone earning £60000 pays 12.5% in pension contributions, which is around £600 per month. You would have had to be earning £90k a year to pay that much, and your pension would be much higher than £800 a month.

55 is a very young age to retire so this will affect the amount of your monthly pension quite a bit

You’re forgetting the reduction due to taking it 5 years early.

@Stillearninglife it all seems to hinge on whether or not you still have the special status or whether you have lost it by not being in post at the time of taking the pension. This will make a massive difference.
My OH retired at 56, they were some circumstances where he didn’t get the actuarial reduction for going early. Unfortunately he didn’t qualify so with the reduction his pension was 6500 less per year. We accepted this although I was quite bitter for a time.