NHS Pensions | All you need to know | 1995, 2008 & 2015 Scheme
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- Опубліковано 28 лип 2024
- Everything you need to know about the NHS Pension Scheme. This is of course, the retirement fund for those amazing hard workers that work day and night in such a challenging environment.
I focus primarily on the latest 2015 Scheme and compare the difference between the older 1995 and 2008 NHS Pension Scheme Scheme,
Chapter Information:
0:00 Introduction
0:21 What are the different NHS Pension versions?
2:03 How much do YOU contribute to NHS Pensions?
4:26 How much does the NHS contribute to NHS Pensions?
6:07 When can you access the NHS Pension?
7:30 How much will you earn?
10:57 NHS Pension Scheme Benefits
▶Financial Madness - NHS Pension Spreadsheet (used in the demo):
docs.google.com/spreadsheets/...
▶NHS Pension Scheme - Contribution Rate:
www.nhsbsa.nhs.uk/member-hub/...
DISCLAIMER - Any advice or (statements perceived to be advice) given in this video and any other videos on my channel are for information purposes only, and does not act as financial advice. Your are fully responsible for your financial decisions. If you are in need of Financial Advice, please seek out a professional advisor. If your are unsure on how to do this, feel free to reach out to me and I am more than happy to guide you.
#NHS #NHSPension #Retirement
Im a senior supervisor for a NHS Trust in the uk. Many of my team haven't a clue about, well about anything TBH and although I'm not the sharpest pen in the pencil pot, I have been really struggling to understand how NHS pensions work.
As a supervisor, I'm the first point of contact for many of my staff and it's embarrassing that I can't help them due to the lack of management training I get, or don't.
But thanks to your videos, I am a lot more comfortable and confident in what i can advise my team . Thank you.
I tried looking at my TRS and it makes absolutely no sense to anyone except for people who are involved in it hence why I went hunting for explanations on why I'm actually paying anything into my pension. Felt like it was just going into a black hole!
There are lots of pension videos from nhsbsa but they don't really explain anything at all, just silly animations and pop up text. This has been a brilliantly clear explanation of how it works.
Thank you.
Thank you Ewan, these comments mean the world and so thanks again for taking the time in writing a comment. I am pleased to hear the video was helpful :)
Thank you for this video. I have been paying NHS Pension for about 12 years but it is only few months ago that I really understand the importance and value of NHS PENSION. Since then I have been doing more research and now I educate people on my UA-cam channel about planning for their future. The future is not as far as many people think.
Thank you so much for this. I have worked for the NHS for 20 years and have struggled to work out the calculations from the statements provided but this has explained things very clearly.
Wonderful!. I am so glad this helped :D.
Very well explained especially with examples given, thank you
Thank you so much for doing this video. Very much appreciated.
My pleasure! I am glad you found it helpful
Thanks a lot! I have been trying to understand the calculations for ages, and you've nicely explained it clearly.
Thank you! It really means a lot to hear that my explanation was clear to understand.
How can anyone give a thumbs down? This guy is providing you with some very useful info if you work in the NHS.
Hahaha thank you for the comment. And really appreciate the positive feedback!
Thank you so much for this video, it has indeed given me more understanding about my pension scheme,
Thanks for the brief yet thorough information
Thanks. I'm.glad you found it helpful
Really useful information, thanks 👍🏽
Thanks Sharon. I am glad it was helpful!
Such an informative video - thank you :)
Glad it was helpful!
Fantastic wee video, cheers for that
Thank you for the kind words. I am glad you found it helpful
This is really helpful. I have been with th nhs for 10 years and never understood it
This is brilliant. Thank you Kozan
You're welcome. Glad you enjoyed it 😀
at last a clear easy to follow guide
Thank you. I am glad you found it helpful :)
very good and well exlplained.
Thank you! I am glad you found this video useful :)
Excellent informative video.
Thank you, I am glad it was helpful!
Super helpful. Thank you so much!
Thank you! I am glad it was helpful!
Wow, great timing. I'm literally getting ready to retire at the age of 63 (64 in sept) as I'm worn out and want to enjoy some time for me. I've been talking to my brother who retired a few years ago, but you've explained it perfectly. Will make my phone call to H.R easier tomorrow 😂
Thankyou
Aww thank you for the kind words. I am so glad this is helpful! I hope the call with HR went well :)
@FinancialMadness
Yes it did thank you😀
Amazing video man! Super descriptive as well made me realize I gotta improve on my vids haha! Just gained a new sub 👌
Thanks man! I am glad you found this video helpful and thank you for subbing!👍
Was a no brainer to like. Thank you
I am glad you thought so :)
Thank you for the video!!
My pleasure! I am glad it was helpful :)
Very informative. Thank you 🙏
Thank you! I am glad it was helpful!
I think this is the first video that actually emphasizes that the employer contribution has no bearing on the amount of pension that you will receive. Well done👍
Thank you! I am glad you found the video helpful :)
Great great great video!!!!
Thank you!! I am glad you found this useful!
So helpful thank you
You're welcome. I am glad you found it helpful 😃
This is SO helpful
I am so glad to hear. Thank you so much :)
This was really helpful
Thank you. I'm glad you found it useful
Thank you very much. Concentrated and helpful information.
Great job. Keep up!
Thank you for your comment. I am glad you found this helpful!
Informative thank you.
Thank you very much!
Great video
great. thank you
No problem. I am glad you found it useful 😃
Great video. Informative and easy to understand!
Thank you! I am glad you thought so.
So useful…Thankyou for explaining something that appears so complicated to read about online!
Thank you! I am glad this was helpful!
Very clear and easy to understand, Thanks!
Glad it was helpful!
What about the lump sum on retirement ? It would be useful to show this as comparison as the 1995 section seems to have a much smaller annual pension vs the 2015 section, however the lump sum would change this comparison.
Last week I was shocked to find that my deferred pension is not subject to any CPI uprate for the years between when I left the NHS (in 1990) and last week when I finally reached my retirement age! I left the NHS as a Band D (Enrolled Nurse) with a few days short of 8 years pensionable service and the pension I receive, as of 2 days ago, is based on my final salary back in 1990 ... and of course that's far below what is minimum wage today. So almost 8 years pension gives me the grand total of £183.99 per month. I think it's criminal that they pull a stroke like that when they tell you it's an "index linked pension" that you're paying into.
Hi @FinancialMadness - This video is definitely what I needed to see. No one from NHS Pensions could answer my questions and this did it in 13 minutes.
I have only just joined the NHS in the past 3 months and I am on the 2015 scheme. I have a long way ahead of me (retirement at 68) so currently another 39 years of working.
If I stay in the NHS, do I pay into the NHS pension until my last pay check before retirement or is there a cap on the maximum amount of years that I can pay into the scheme?
In other words, can I pay for another 39 years or are my contributions stopped before that?
Also, am I right in thinking that the 25% tax free lump sum is still available, but only after I have retired? Also, do they work out 25% from your annual entitlement or some other figure?
This was so excellent, I loved the excel calculation!
Thanks. I am glad you found it helpful :)
Lots of help as a NHS worker who is unsure about being in the NHS pension. Thanks very much Kozan and financial madness for this help! Much appreciated!
Thank you so much. I am glad you found this really useful :)
Hi, I'm actually new in the UK and I'm contemplating if I should opt out from the pension scheme for the meantime until I adjusted with my finances and to enroll back. Is it true that when you opted out of the pension scheme, the tax will increase? Hope you can enlighten me with this. Thanks.
Btw, your video helped me well to understand its benefit. Thanks.
The issue a lot of staff who are on the 1995 scheme are having relates to them being switched onto the 2015 scheme and then the McCloud judgement where they will be able to count the years from 2015 to 2022 as being 1995 scheme years. The problem is that any years on the CARE scheme aren't counted as pensionable years under the 1995 scheme so for example my wife's years of Reckonable Service is 18, in 2015 (or 25 after McCloud 2022). So if she works on to 2029 and retires at 60 her 1995 scheme pension isn't benefiting those years as multiplication years and the pension generated from 2022 to 2029 will be CARE scheme pension which she won't get to 67 (68 if government gets changes through).
Also, staff trying to boost their salary in final three years by doing a year of nights are being told conflicting messages as to what a year means. The book says 365 days but is this 12 rolling months, a financial year or January to December?
Hi Kozan,
Thankyou for taking the time to reply to my question I really appreciate it.
I actually managed to speak to somebody a few days ago from NHS pensions who said that yes next April my 1995 pension would close but I wouldn’t loose the benefits I had accumulated so far and from 1April 2022 the rest of of my pension contributions would go into 2015 pension scheme. She said I would I technically have 2 NHS pensions the 1995 one from 2005 (when I started working for NHS) till 1/4/22 and then the 2015 until I retire.
I understand the 1995 will be closed so no more contributions can be added to it but wondered if I don’t draw it until I retire in 8 years time could its value still increase or possibly decrease.
Your videos are really useful and easy for everybody to understand. Thanks again for making them, I look forward to watching your Q & A on NHS pensions.
Karen
Hi Karen,
Yes, this is correct. Whenever, one person transfers from one scheme to another, the two/three schemes do not merge together. The legacy schemes still exist the only difference is now you are contributing to a new scheme. I will be sure to make this more clear in my Q&A video.
With regards to your 8 years question (it is a really good question), the value of these schemes will not change. For the 1995 scheme your Final Salary is based on your salary during the last 3 years of your membership. Reading the 1995 Booklet (link below, slide 5), your final salary is adjusted to keep up with the cost of living. So you should expect your 1995 final salary to increase at the rate of inflation.
www.nhsbsa.nhs.uk/sites/default/files/2018-04/Key%20Notes-1995%20Section%20Estimates%20%28web%29-20180409-%28V2%29.pdf
Let me know if you want any other questions answered :)
Hi Kozan, thank you once again for your help, it is appreciated. Karen
@@grahamlampert8887 No problem :)
Thank you, thank you, thank you, been asking for years how this works now I finally understand.
Glad it helped! Thank you for the kind comment :)
Brilliant video . thanks a lot . I just feel it should have been longer and more descriptive . In the end I was thirsting for more .
Hi Faiz, thank you for your kind comments!
If only everyone shared your enthusiasm when it comes to Pensions 😂. If you would like me to make another video on the NHS Pensions (or anything else Personal Finance related), feel free to let me know, I am always open for suggestions :).
While the video was excellent and something which many of us have sought for , I feel I would be even more interested in the following .
1. How does your family get affected and compensated in case of your death while in harness .
2. What happens to your pension after your death post retirement . How to calculate how much the spouse will get .
3. Do you need to nominate your wife for the pension or is it automatic .
4. Is there any scheme better than the NHS pension currently in the UK .
5 . Are there any advantages or disadvantages of starting late and how much actually we may lose by the loss of compounding .
6. Is a life insurance intrinsic to the NHS pension and how much is it .
7. What is the earliest age at which you may voluntarily retire and still be able to avail some part of the pension ( 2015) .
I don't expect you to answer all of these but just some suggestions of what people may seek to know .
And again , thank you very much for a stellar video .
Thanks Faiz, for these insight. I get will probs do a Q&A video based on your questions and from others too. Thank you for sharing
Hi, are you able to explain the revaluation factor and what it means for the value of my pension please? Thank you
You should be able to see by these questions how badly the NHS explain anything. I cannot get a soul to actually help. So thank you for your videos....
Thank you again :)
Thank you, My NHS pension officer couldn't explain this at all.
Thanks Rubel! This comment made my evening ☺️
Really helpful, great video. Up late at night thinking about the future but glad I stumbled upon this 😄. I am wondering if you think it is work opening a SIPS as well as paying into the nhs pension. I hear it can act as a bridge if you wish to retire earlier than the standard retirement age. 68 seems too long for me!
Hi Andy, I am glad you found this video helpful after what I can only imagine must have been some serious Personal Finance UA-cam Rabbit Hole! 😂
You have quiet a few options available to you, if the retirement age of 68 is of concern to you then a SIPP is a good way to combat that, it can act as a top-up and has an earlier retirement age of 55 (soon to be 57).
Alternatively, you can think of investing your money through an ISA. Unlike the Pensions you don't get tax rebates when you contribute, but you don't have to worry about paying any taxes at withdrawal, and there are no age restrictions too.
I made a video earlier where I toss up the pros and cons of contributing more to Pensions or ISAs, so might be worth checking out: ua-cam.com/video/e3ckUUMBxmU/v-deo.html
Also, the next video I am working on is the concept of how contributing too much to your pension can actually be a bad thing. Might be helpful for you to check that out once its released on Monday :)
thank you for your valuable videos. I wanted to ask if we could have a break from contribution to the scheme ( especially at the beginning of NHS work? if yes how long could it be to be able to come back or start our contribution again?
Hi there,
Thanks for the kind comment, I am glad you found it useful. And yes you can Opt Out and In at any point. There is a really helpful FAQ page provided by the NHS which should answer most of your questions. Let me know if anything doesn't make sense :)
www.nhsbsa.nhs.uk/sites/default/files/2017-03/Member%20Opting%20Out%20factsheet%20%2802.2017%29%20%28V5%29.pdf
Hi Kozan,
Thank you for such helpful information. I am 53 years old was working within the NHS 1995 scheme from 1994 to 2008 then I left the NHS and am currently working as a Nurse in Canada. Could you provide some insight on how I can claim a lump sum as I heard it can be claimed from 50 years old. Is that correct?
Thank you so much for taking your time to make this video .. it is really helpful.. one small Question. What if some one dies far before reaching the retirement age ?
Hi Dekey,
Apologies for the delayed reply. I am glad you found the video useful.
If you become severely ill, you can gain access early to your pension, without any penalty.
In the event of you passing away before retirement ages then yes, your Spouse/ Civil Partner or nominated Partner can receive a lump sum on death and they will later receive a proportion of your final salary until they pass away.
Thank you. I have really understood more from this video.
One question? Are we able to nominate a beneficiary of a will to the pension pot amount when a pensioner dies?
I joined nhs in 1978 took my lump sum in 1995 .
joined again in 1998 and am still employed ,will I still collect my monthly sum when I retire in Oct 2022 .Thanks glenda
Great video and super informative! Thank you for sharing, please keep the great work going!!
Thank you! Comments like these, help me give me the drive to do more videos this. I am glad this was helpful :)
This video is very helpful! I am currently on the 2015 NHS Pension Scheme. A lot of people have been telling me to opt out of the pension scheme as it is a contribution scheme and the amount of money you put into the pot is adjusted with the market and the money you receive when you retire can be much lower compared to what you actually put in. You clarified that the NHS Pension Scheme which works on the defined benefit scheme. I have a question about the re-build rate and pension re-evaluated section (time 9:24). You discuss what the annual pension entitlement is and base it off the re-build rate and pension re-evaluated rate, however, what about the 9% contribution by the employee and 21% contribution by the employer? Where's all of this money gone to?
Hi Parisah,
Thanks for the question and I can see from another comment you already found the answer in my other NHS Pension Video. I am just posting the link here, just in case someone else has the same question and would like it answered too :)
ua-cam.com/video/jiJNecxa7AA/v-deo.html&lc=UgxNgduBDdl4BFP3xE94AaABAg
Nice video
Can I ask in my case I want to opt out because i want to leave the uk.I have joined d nhs pension scheme more than a year ago ,will my refund include my employer‘s contribution as well or is it just my own contribution.
Now i can decide if i go for a pension or not. Thank you!!
You're welcome! I am glad I made it clearer for you 😃
OK I'm 60 and lived in France for 20 years. In that time I didn't pay into a pension scheme. I started working for the NHS in 2021. I decided to add a top up to my NHS pension contributions by paying in the maximum allowed, which is £6500 and may do the same this year. Is that a good idea?
Fantastic! I just sat through an hour long webinar on pensions organised by my LMC and was none the wiser. 10 mins watching you and every word was useful and clearly explained. Thanks!
Thank you Lucy! I am glad you found this helpful :).
If you take redundancy from the nhs can you take the pension at age 55 ?
Hi Kozan, really helpful video! What happens if you would like to leave the NHS early (say 55 years old) but have had a 30+ year career in the NHS and do not need to access to your NHS pension until state retirement age (68 years old). Would this affect your entitlement? This would be based on the 2015 scheme. Thank you!
Hi A Taylor.
Great to hear that you found the video helpful! As for your NHS pension, it's important to note that choosing to do this won't have any negative impact on your current 2015 pension benefits. The only thing that would change is that your benefits would no longer increase (because you are no longer working, however, that your pension should still be adjusted in line with inflation). So don't worry about any penalties - you're good to go!
Thank you! My wife's NHS pension statement was indecipherable to us until I watched your video. Now makes complete sense.
Excellent! I am so glad this video was helpful. Thank you for commenting!
I worked from 1973 as a student qualified in 77 and continued working until 1985. I then left. I am assuming l will not be entitled to an nhs pension. Could you please let me know. Thank you.
If we opt out of pension after 1 year, Do we get the amount which NHS also contributed to it? ( for eg: The salary is 2000 pounds. I have contributed 200 pounds each month and NHS contributed 400 ( 20% of 2000) each month. If I opt out after 1 year, do I get 7200 pounds? (200 * 12 + 400 *12)
Superb video!!! Thank you so much. What is CEV and how do I find it in my TRS?
Thanks Ed, I am glad you found this helpful. Do you mean a CETV? You should be able to access your TRS using a gov.uk verify or via ESR if your employer has given you access to this.
Hi...thanks for sharing your knowledge on pension. I'm a Registered Nurse planning on immigrating to the to join the NHS in a couple of months. My question to you... I'm 55 years old, if I decide to work between 3-5 years with the NHS, can I opt to retire at 60 years? Would I received a pension? I know it would just be minimum working only three to five years. My salary offer is £28,407/annually.
Thanks!
If I retire at 60 I will have part 95 and 2015 pension pots. My question is for the 95 pension where it is the best of the last 3 years, does this apply to the last 3 years up until 2015 when it changed to the new scheme or it is the best of the last 3 years at point of retiring?
Hi Karen, good question. It counts the best of the last 3 years at the point of retiring :)
Thanks for simplifying that. I was wondering if there’s any way I can find an excel file like the one you showed to calculate my pension entitlement with my own numbers
Hi Mohit, thank you - I am glad you found it useful.
The spreadsheet is something I created and you can access it using this link (docs.google.com/spreadsheets/d/1GHcrRnKQO5aOq0U1BK0HfmS01nwpdhnk0wd65VHjqYs/edit?usp=sharing)
It is restricted, so if you want to save your changes just save another copy :)
I have also put the link in the comments section too, just in case somebody else finds it useful!
Hi. If your working past your 1995 retirement age and are moved into the 2015 scheme in April 2022. Which years salary are used to work out your 1995 allowance.
Hi Paul,
Great question. The 1995 Scheme will still be caluclated using your Final Salary even when moved to the 2015 Scheme. As long as you don't take a break in service for more than 5 years.
As per the NHS Website:
"_You will not lose your final salary link if you have one
You’ll also keep your final salary link for your 1995/2008 Scheme benefits, as long as you don't have a break in membership of more than 5 years. This means when it’s time to pay your 1995/2008 benefits, they’ll be calculated using your final salary at retirement.
If you've built up practitioner benefits these will be protected at retirement using arrangements equivalent to a final salary link, as long as you don't have a break in membership of more than 5 years._ "
www.nhsbsa.nhs.uk/changes-public-service-pensions/your-nhs-pension-after-1-april-2022
Thank you for the video. I have recently realized the changes and now understand that the 1995/2008 benefits remain. I'm 51. Started in 2001, left 2015 and returned 2021 at a lower banding and therefore salary. Will my 1995/2008 remain with the salary i had at that time (it was the highest in 2015 when I left). I really struggle with the TRS to access my own information!
Hi Tilly,
Thank you for the comment and kind words.
The older pensions do take into account your salary at the time of your pension.
But because you left for a significant period I have a feeling there might be an exemption. I am currently away on leave and can check when I get back over the weekend.
Hi Tilly,
So reading the NHS Documentation here: www.nhsbsa.nhs.uk/sites/default/files/2021-08/NHSPensions_Glossary_of_commonly_used_terms_V2.0_202108.pdf
It says
_"If you’re a deferred member, your benefits will be based on your scheme membership and the best of your last 3 years’ pensionable pay or reckonable pay when you left NHS service or stopped contributing to the NHS Pension Scheme.
The legacy 1995/2008 Scheme closed to new members with effect from 1 April 2015. All members who are currently in the 1995/2008 Scheme will be moved into the 2015 Scheme on 1 April 2022. You won’t lose any benefits you earned under the legacy scheme and you’ll keep your final salary link for benefits earned before 1 April 2022, as long as you haven’t had a break in service of more than 5 years between 1 April 2012 and 31 March 2022."_
As you have had a break in service for more than 5 years, that means your Legacy Pension will be based on your salary in 2001.
Really helpful video, thank you! I’m looking into additional voluntary contributions to boost my NHS pension. Online help is very limited & online only really directs me Additional Pension. Is this the same thing??
Glad it was helpful!
Additional Pension is just one possible way you can contribute more to your NHS Pension. I created a video on what this type means and other common options that are also available. ua-cam.com/video/avD2cYOyZQU/v-deo.html
I hope this helps :)
Is there any kind of insurance in nhs pension ? For example I work for NHS 5 years and I'm part of the nhs pension. And For example I had accident or I'm sick and I can't work for NHS. I'm band 7 is there any protection in that side ?
There doesn't seem to me be any insurance cover 'per-se' on NHS pension if you become temporarily out of action due to a sickness or an accident. They do allow for early access to your pension if you do become permanently incapable to carry out your duties.
www.nhsbsa.nhs.uk/sites/default/files/2019-11/Ill%20health-AW33E-20190717-%28V18%29%20digital.pdf
There is a separate scheme called the 'Injury Benefits Scheme' which pays benefits to temporary or permanent loss of earnings, however this seems to cover incidents that are related to work only. So accidents outside of work will not be covered. Also, do check if you are covered under the scheme, there is a helpful section on the websites FAQs. www.nhsbsa.nhs.uk/about-injury-benefits-scheme
For anything else, you may have to go privately to obtain full coverage, but it is worth speaking with your Employer directly to check this.
Hi what if you want to stop working at 45 years old. Does still apply and i will get yearly pension
Oh, thanks! That was great! Would you make a video that compare NHS pension to the other pension schemes and/or DCA on stocks ETFs?
Great suggestion! I will be sure to add that to my list.
@@FinancialMadness I'm looking foward to see it
Thanks for the video, it was very clear and informative!
Based on what you described, would it make more sense to opt out if I don't intend to work for the NHS in the long term? Let's say I was to only stay for another two years max. Appreciate it's difficult to say but just thinking conceptually.
For a bit of background, I've worked for the NHS as a data and analytics professional for just over 3.5 years now, and most of career prior to this has been in the same field but in private sector. Based on where the more interesting things are happening in my field, my general career progression is more likely to take me back to private sector.
Any help appreciated. Thanks.
Hi Mogster, Thank you for your kind comments and apologies for the slight delay in my response.
I do want to state for the record that, what I say below should not be considered financial advise, I would encourage you to do as much research as possible and seek out professional help before making a decision.
I am assuming given the timeframe you have given me you are on the 2015 Pension Scheme. Some things to consider:
1. Since its introduction, you are no longer able to transfer out your NHS pension to another pension pot that is on the defined contribution (DC) scheme. Most of the private sector run on this DC scheme and defined benefits (which is what the NHS uses), is a rare find nowadays. So assuming you have been contributing for the 3.5years you have been working in the NHS, this money is essentially locked away and cannot be accessed until you reach your Normal Pension Age, OR there is a chance you can transfer it to another pension, if that too is running a defined benefits (DB) scheme.
2. What do you plan to do with the money instead if you are not contributing to your Pension? You always need a mechanism/pot of money that will be used for your later years, if its not going to be the NHS Pension, what will it be?
It may not seem it, but two years can make a lot of difference in determining your retirement income. I would suggest looking into Investment ISAs or Personal Private Pensions (SIPP) as potential alternatives. If you decide to just leave your money in a normal savings account however, your money will just lose value overtime thanks to inflation.
3. NHS Pension is a final salary for life. Perhaps use the calculator is demo'd in this video or speak to someone with in the NHS to get an idea of what your Pension Benefits look like today and in 2 years when you decided to leave. You can then make a judgment on whether you are satisfied with the growth of your final salary pension between now vs 2 years. If you are then maybe consider keeping it, if not perhaps refer back to 2).
The NHS also have a documentation on leaving the scheme, which is well worth a read: www.nhsbsa.nhs.uk/sites/default/files/2018-11/Leaving%20Early%20and%20Transferring%20Out%20Guide%20%28V16%29%20-%2011.2018.pdf
I hope that makes sense and I have given you some room for thought. If you have any further questions on this, do let me know.
Many Thanks!
@@FinancialMadness Thanks for the advice. Don't apologise at all, you have no obligation to respond.
I'll definitely consider those points.
NHS Pension can be confusing to understand. Let me know if you have any more questions on the matter?
Check out my other video, on How To Contribute Extra to the NHS Pension: ua-cam.com/video/avD2cYOyZQU/v-deo.html
I live in London does the pension include or exclude London higher cost area supplements when taking into consideration the salary ?
Hi there. Not explicitly.
If you are working in London, typically your salary will be higher, than most other areas (due to the higher cost of living) and therefore the amount from the Build Up rate will be higher and therefore more will be added to your Pension Benefits.
@@FinancialMadness Thanks
I do find it confusing with NHS pension and trying to find out how do I know what is my total pension doing now. I have looks at TRS and is that the way to look at? Or is there way to see? Thanks again
Good question. So your Total Rewards Statement should show you how much of your Pension is currently worth. But I understand there is a separate service you can request if you want to get a prediction of how much your pension will be.
Follow this link: www.nhsbsa.nhs.uk/member-hub/getting-estimate-your-pension
I hope this helps. Let me know if you have any more questions.
Thanks
I know the 1995 pension will be frozen but will it still rise with inflation? Thanks, very helpful videos!
Yes. Even if you are not an active member of the 1995 Scheme, the pension benefits are still protected against inflation. You can find more information here
www.bma.org.uk/pay-and-contracts/pensions/increases-to-your-pension/inflationary-increases-to-your-nhs-pension#:~:text=If%20you%20are%20an%20active,with%20pensions%20increases%20plus%201.5%25.
if i work for 5 years in nhs am eligible to get pension? can i retire early at 57 and my current age 51 and the early retirement how much amount is reduced
what hapens the pension (2015 )amount ,when a employer died ? if spouse presnt, if childeren abvoe 18 age..?
Hi, thank you for the question.
If the employee dies before reaching retirement or within 5 years of retirement and the spouse is present without any dependant children, then the spouse may be entitled to a lump sum cash.
If the employee dies whilst in retirement, the spouse will receive the employees final salary pension, but at a reduced rate.
I hope this helps
Thanks
Good video...
Pls explain my annual salary before tax is 9000 per annum...
Pls calculate how much will be mine and how much will be NHS Contribution per month from this gross salary ?
I have responded in your other comment.
If you are startibg your career in the NHS ,please do yourself a favour and join the pension. In your 20s it may feel like wasting money but it is anything but.
Great video. Once have taken your pension ie retired, does your pension increase annually by the current rate of inflation?
NHS pensions are subject to an annual increase which is based upon the consumer price index (CPI) as laid down by HM Treasury every year.
The increase will be applied to your pension at the beginning of April in the new tax year.
@@gerardmccartney3186 thank you for the helpful information.
Yes they do. Thank you gerard for also replying back
Much informative..In ur example table u showed pension revaluated and rebuild rate.accoeding to ur example one who only get £14000 p.a..Where the contributions going? can u pls explain with our contribution and nhs contribution with an example table.if my p.a £25000 and contribution 9.3% monthly
Hi Sona S, thank you for your question.
The NHS pensions work slightly differently than most workplace pensions. It is on something called a "Defined Benefits Scheme" which is a scheme that allows you to get a final salary for life until you die. (This is different to the common "Defined Contribution Scheme', which gives you a pension based on how much you and the employer have contributed into your individual Pension Pot and pension for life is not guaranteed).
Under the NHS Defined Benefits Scheme the money you contribute (the 9.3%) and your employers contributions effectively go into this big NHS Pension Piggy Bank. Everyone who is working for the NHS and is currently in the scheme will also be contributing to the same Pension Piggy Bank. The money from this Piggy Bank is used to help finance NHS retirees who are now claiming on their Pension today.
The money that you contribute, doesn't have a direct impact on what you will get in the future. Once you reach retirement age, the money you get will be financed by those who will be working and contributing to the NHS Pension Piggy Bank at that point in time. (By the way, this highly simplified, but the concept still stands)
If you are in the 2015 scheme the amount you get at retirement is determined by your Salary/Build-Up Rate (1/54th of your Salary), the Revaluation Rate (Inflation plus 1.5%). Calculating your projected income is a bit complex as there is no way of knowing what your Salary and the Inflation Rate will be in the future. The example I gave in the video was simplified as I fixed Salary at £20,000 for 25 years (salaries tend to increase as person develop through their careers). I also fixed inflation (which changes year on year). I did this to demonstrate the concept of how the NHS Pension is calculated. From reading online, I understand, that may be a way to get a better estimate through work, I would suggest speaking with someone within your workplace on how to do that (HR or the Payroll team should be able to advise you)
I hope this helped. Let me know if you have any further questions :)
Hi
I am totally confused with what i can take as a lump sum and when .I am in 2015 which i only joined in 2017 so pension will not be any great deal .
I have a value on my TRS OF £1044.36 (Pension) is this the annual pension as it stands today?
I have a lump sum value of £6962.40 , can i take this amount on retirement?
Hi Denise,
Thanks for commenting. I have not actually seen a TRS and the information online is very limited. So the below is my best guess is (but I do think it is accurate).
Firstly, Yes the value of your Benefits stands at £1,044.36 per year (once you reach Normal Pension Age).
And Secondly, the lump sum value represents your pension benefits if you were to fully take it out as a lump sum (at Normal Pension Age too)
I found this website quite useful in providing extra detail on the matter: www.legalandmedical.co.uk/navigate-and-understand-your-nhs-total-reward-statement/
Hi Financial madness , if I retired early ie 62 . I would not need my pension until normal pension age 67 ahhhh. So what would happen to my pension ie any rise over those years?
Hi John, yes great question, if you stopped working for the NHS, from that period until you claim your pension will still increase by the rate of inflation (i.e. Revaluation Rate)
Great explanation. Can you still pay additional contributions to the 1995 NHS pension scheme?
Thank you. I am glad you enjoyed the video.
Only if it you are an active member of the 1995 scheme can you make additional contributions to it.
Oh dear. Some serious inaccuracies here. Needs an update to include the remedy arising from the McLeod judgement
Hi Ian,
A video has recently been released on McCloud Judgement. I hope this address any concerns you have.
Hi, I work for the nhs I have joined the 2015 pension scheme, my salary is 20k I am 49 yrs old. when I retire I would like to live comfortably. I would like to buy additional pension credits, but I don't know hoe much to increase my contributions by. I would like an annual pension income of 38k at retirement. is this possible, and how much do I have to increase my monthly pension instalments by?
thanks for your help. Jonathan hinkins
Hi Jonathan,
Thanks for reaching out. It is hard to say without more information - however on average it is usually a challenge to save a Pension Income that is larger than your regular working income (not impossible, but most people tend to achieve below this). That being said, there are different variables that we can look into? I.e. Will you be able to qualify for the full state pension, any previous private pensions you have had since you joined the 2015 scheme.
I appreciate this information is quite sensitive, so feel free to email me at financialmadness1@gmail.com if you want a further discussion.
Again, please be reminded that I am not a financial advisor, and anything I do say should not be taken as advice. I can only provide information for educational purposes. If you would prefer advice, then please do seek out professional assistance.
Does the NHS contribution is 20% of the annual income after OR before Tax ?
The NHS pension contribution is taken from your salary before tax. This means that the contribution is calculated based on your gross salary before any tax deductions are made. But remember, this is a type of Defined Benefits Scheme, the money you get from the scheme is dependent on how many years you contribute, average salary, and the revaluation rate. Yours and the employers contributions are helping to pay for the current pensioners of the scheme. Hope that makes sense
Brilliant video, I also have a private pension unrelated with about £2,000 in. Can you transfer old private pensions into the NHS pensions as I'm thinking whether to transfer it or not to the NHS pension scheme? Or Whether to keep it aside and take it all as a lump sum at retirement or have monthly annuity which would probably be minimal each year.
Thanks Ryan for the comment, I am glad you found this useful.
Yes there is a possibility of a transfer however there are time and age limits. Assuming you are on the 2015 scheme the transfer has to be before your Normal Pension Age and within the 12 months of you being an eligible member to join the scheme. I can't advise on which would be ideal option to take, but there are some definite factors to consider:
a. As your private pension is effectively a pot of cash, it will be interesting to see how much it actually earns you in NHS Pension Benefits?
b. You can access your Private Pension much earlier than the NHS Pension. Private Pension = 55/57 VS 2015 NHS Pension = 66-68
For more info on transfers, the NHS do have a booklet:
www.nhsbsa.nhs.uk/sites/default/files/2020-01/Transfer%20Booklet%20%28V20%29%2001.2020_0.pdf
I also found a similar article of someone in a similar situation which I think better breaks it down:
www.thisismoney.co.uk/money/pensions/article-6665599/Should-transfer-L-G-pot-NHS-Pensions-final-salary-scheme.html
Can you make additional payments in to your NHS pension?
Hi Tom, yes you can.
I actually made a video on this, if you want to learn more. ua-cam.com/video/avD2cYOyZQU/v-deo.html
Thank you for making this really helpful video. I have just checked my nhs pension statement and it says 1995. I think I have read somewhere from April 2022 everybody will be transferred to 2015 pension scheme, is this correct? Do you know how this will affect my pension will I still be entitled to the figures quoted in my latest statement and then from 2022 I will be entitled to new 2015 scheme for the remaining years .
Karen Lampert
Hi Karen,
Yes you are correct. I am actually creating a NHS Pension Q&A video where I address this question in more detail. But to give you a (somewhat) quick overview.
When the 2015 Scheme was introduced most members were automatically switched onto this scheme. Protection was given to members who met a specific condition, these protection was known as "Full Protection" (meaning you will never move to the 2015 scheme), or "Tapered Protection" (meaning you will eventually move to the 2015 scheme, when this happened would be down to your age).
So the Government were actually taken to court for this approach, on the grounds of 'age discrimination' and the Courts found the Governments guilty of discriminating by age. So the government have since come up with a solution to fix this discrimination.
This will only be affecting those that received 'tapered or full' protections' or had been forced to transition from the 1995/2008 scheme to the 2015 scheme between the date of the 1st April 2015 to 31st March 2022. The government have deemed this as the remedy period.
So for this remedy period:
- Members who transitioned to the 2015 scheme can compare their 2015 benefits to their legacy benefits and choose the most valuable.
- Anyone who was able to remain in their legacy scheme can compare their benefits to those in the 2015 scheme and again chose the most valuable
The comparisons will be sent to you once you are ready to claim on Pensions and you can then pick which option is most valuable to you.
But yes, after April 2022. the 1995/2008 schemes will close and only the 2015 scheme will be active.
I hope this helps, let me know if you have any further questions.
Have been in nhs for almost 9 years joining in 2014. Would love to know what my pension is now worth
You should get a statement every year. You need to log onto the website. SPPA for Scotland, NHSBSA England Wales.
Firstly, thank you for explaining the basics, but I have to take um-bridge your singing the merits of these schemes. Firstly, like other similar videos you can't simply use a fixed wage in your calculations. The 2015 scheme is effectively, giving with one hand (re-evaluation rate), and taking with the other by pulling down the average using sub inflation wages. This penalises those who have been in the NHS scheme for longer. Particularly, when factoring in the abrogation of pay scale bands, which effectively suppressed the wages of longer serving members of the service. It also doesn't matter how much your employer puts in, lower band workers would have to work 54 years to get their wages in retirement. Any adjustment for inflation is countenanced with career average of their wages. In contrast the Civil Service Pension salaried scheme pays 1/60 pensionable earnings, and the alpha contributory pension scheme (equivalent of the 2015) permits early retirement at age 60.
Thank you for explaining in an easy to understand way. I have both 1995/2008 and 2015 pensions (joined NHS in 2004) but I did not leave the NHS and rejoin. Can you explain how someone would have both even though they have continuous service - I'm 56.
Hi Jillee, thank you for the kind words and I am glad you found this useful.
In answer to your question, its important to know that even if you joined the NHS under a different scheme (in your case it would have been the 1995 Scheme initially), when the 2015 Scheme was introduced, all members of 1995/2008 were automatically transferred onto this new scheme. (There were some exceptions to this rule, and this was dependant on the members years of service and age.)
In your case you didn't get this exemption so you were transferred onto the 2015 scheme. You can still access your Pension Benefits from the older schemes which would be ages 60/65. But now that you are enrolled in the 2015 scheme you won't be able to access the Full Benefits until you hit State Pension age.
I hope this made sense, let me know otherwise 😀
@@FinancialMadness thank you very much for explaining
You're very welcome!
I have worked in the NHS since the age of 16 now 36 , so have about half of my pension in the 1995 scheme and half in the 2015.
My question is regarding enhancements to my pay and how this will affect my pension. For example I receive stand by payment £325 for on call and a recruitment and retention payment of £224 monthly basis ,both of which are pensionable pay.
It is my understanding that the 2015 is career average , so does this mean that my extra contribution are not going to ultimately increase what my pension salary will be? Any help would be much appreciated.
Hi there,
Thanks for reaching out.
So any pensionable pay is taken into the 2015 career average scheme, so these extra payments will help increase your pension salary. And should be taken into account when calculating your Career Average.
I hope this helps
@@FinancialMadnessThanks you for taking the time to answer that for me. Much appreciated 👍🏼
im just curious about this nhs pension, what if someone passed away before the age of 55 does she/he get back the money she or he contributed?
Hi Ivy,
Good question, so if the member of the NHS Pension passes away before they can claim it. A pay-out will be made to a beneficiary (normally this would automatically be a spouse or civil partner, unless specified otherwise). More information can be found here: www.nhsbsa.nhs.uk/pensioner-hub/bereavement/what-happens-your-pension-when-you-die#:~:text=The%20NHS%20Pension%20Scheme%20provides,the%20event%20of%20your%20death.