Government pensions not so gilt edged? Wondering about withdrawing from NHS pension.
13 January 2012, 04:24 PM
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Government pensions not so gilt edged? Wondering about withdrawing from NHS pension.
An unheard of proposition for a doctor to withdraw from a career average earnings based NHS pension scheme?
There are proposals to approximately double the pension contributions that doctors make over the next few years, plus working until 67 instead of 60, all to get the same pension, that is then uplifted by CPI not RPI. The NHS pension scheme is already I understand in surplus, which means it is paying out less than it is taking in, as a result of previous increases.
Due to efforts of the press and governments, there is now a public perception that doctors are overpaid, but I'm worse off in real terms than I was 10 years ago when there was a recruitment crisis. The initial gains from the new contracts have been eroded through extra conditions and work attached to the same payments year on year, plus we've already been frozen for I think 4 years now. There are many people who are real terms worse off than 10 years ago, but it is not what you expect reading the newspapers about fat cat GP incomes.
On the other hand in this environment I'm very pleased to have an interesting and reasonably secure job, but earning a fraction of what I read about in the Daily Mail.
The profession are discussing what to do about it. I thought Scoobynet was an interesting source of wide opinion on the topic. I'd not strike, and am not a member of a trade union anyway.
I'm simply thinking of withdrawing from the NHS pension scheme and that would freeze my existing benefits. Then I can keep the money (after tax of course), invest or spend as I wish, retire when I can afford it etc. If everyone pulled out of a scheme that is just going to be subsidising the treasury more, then presumably it would collapse.
We all need to accept a reduction in living standards, and all need to properly fund our retirement. Generally I support this government, but I cannot see how public sector pensions can be considered anything special when a profession gets less out than it is putting in and the balance goes to the treasury. Who would do that voluntarily?
It may be worth saying that as GPs are self employed we can get to keep our "employer's" as well as "employee's" superannuation. We have to pay income tax on it, but employees like Consultants if they left the scheme might be worse off.
The only reason left for me to go into a pension is if it subsidised in some way. It already isn't and in a few years will be the dramatic reverse and just another tax.
There are proposals to approximately double the pension contributions that doctors make over the next few years, plus working until 67 instead of 60, all to get the same pension, that is then uplifted by CPI not RPI. The NHS pension scheme is already I understand in surplus, which means it is paying out less than it is taking in, as a result of previous increases.
Due to efforts of the press and governments, there is now a public perception that doctors are overpaid, but I'm worse off in real terms than I was 10 years ago when there was a recruitment crisis. The initial gains from the new contracts have been eroded through extra conditions and work attached to the same payments year on year, plus we've already been frozen for I think 4 years now. There are many people who are real terms worse off than 10 years ago, but it is not what you expect reading the newspapers about fat cat GP incomes.
On the other hand in this environment I'm very pleased to have an interesting and reasonably secure job, but earning a fraction of what I read about in the Daily Mail.
The profession are discussing what to do about it. I thought Scoobynet was an interesting source of wide opinion on the topic. I'd not strike, and am not a member of a trade union anyway.
I'm simply thinking of withdrawing from the NHS pension scheme and that would freeze my existing benefits. Then I can keep the money (after tax of course), invest or spend as I wish, retire when I can afford it etc. If everyone pulled out of a scheme that is just going to be subsidising the treasury more, then presumably it would collapse.
We all need to accept a reduction in living standards, and all need to properly fund our retirement. Generally I support this government, but I cannot see how public sector pensions can be considered anything special when a profession gets less out than it is putting in and the balance goes to the treasury. Who would do that voluntarily?
It may be worth saying that as GPs are self employed we can get to keep our "employer's" as well as "employee's" superannuation. We have to pay income tax on it, but employees like Consultants if they left the scheme might be worse off.
The only reason left for me to go into a pension is if it subsidised in some way. It already isn't and in a few years will be the dramatic reverse and just another tax.
Last edited by john banks; 13 January 2012 at 04:27 PM.
13 January 2012, 05:08 PM
#2
it's a minefield! Everybody has different circumstances (i.e. - if you are two years from retirement = dont to anything ::: if you are twenty years from retiirement = just what to do !!)
I suspect the revised NHS pension fund will have far better benefits that anything you can get privately....
A lot of employer schemes will pay into the fund the same amount as the the employee (i.e. you put 10% in they put 10% in your fund ) - you wouldnt get this in your own scheme
What changes are they proposing ? - what percentage are you paying at the moment and what percentage increase wil be imposed
I suspect the revised NHS pension fund will have far better benefits that anything you can get privately....
A lot of employer schemes will pay into the fund the same amount as the the employee (i.e. you put 10% in they put 10% in your fund ) - you wouldnt get this in your own scheme
What changes are they proposing ? - what percentage are you paying at the moment and what percentage increase wil be imposed
13 January 2012, 05:35 PM
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I pay 7.5% now, rising I think to 14.5% with the changes. We have to pay our employer's and employee's (13.5%) contributions as we're self employed but independent contractors to the NHS.
Based on retiring at 67 and living until 80, on the new scheme, ignoring inflation in the contributions or benefits, I'd be getting back less than I paid in (which will be 14.5+13.5=28% of my income).
So opting out would let me take 28% of my income each month, and pay income tax on it, rather than putting it into a pension scheme. This would clear my new mortgage faster. I'd be responsible for saving for my own retirement that way.
Based on retiring at 67 and living until 80, on the new scheme, ignoring inflation in the contributions or benefits, I'd be getting back less than I paid in (which will be 14.5+13.5=28% of my income).
So opting out would let me take 28% of my income each month, and pay income tax on it, rather than putting it into a pension scheme. This would clear my new mortgage faster. I'd be responsible for saving for my own retirement that way.
13 January 2012, 06:06 PM
#5
John -- looking at that, i c your point !!
It is now universal in the Pensions world....
My own 'Final' salary pension has gone from being 'non-contributary' to paying 3% then 6% then 9% to being closed !!
(the time period for that has been in the past 10 years )
It is now universal in the Pensions world....
My own 'Final' salary pension has gone from being 'non-contributary' to paying 3% then 6% then 9% to being closed !!
(the time period for that has been in the past 10 years )
Last edited by albob; 14 January 2012 at 11:43 AM. Reason: too much information !!
13 January 2012, 06:14 PM
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Oh no. You'll have to work till your 67......... that's shocking.
You'll have to work to the same age as those scummy Private sector workers who prop up the public sector pensions.
I feel sorry for you, I really do.
You'll have to work to the same age as those scummy Private sector workers who prop up the public sector pensions.
I feel sorry for you, I really do.
13 January 2012, 06:26 PM
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Explain how you are propping up the NHS pension scheme? Before you give the normal Daily Mail rhetoric why don't you actually read John Bank's post
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13 January 2012, 06:34 PM
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Are you not on a final salary scheme ? I am not sure how you think you will get less out than you put in apart from the usual taxes etc you have to pay. If you think a private pension will give a better return then go for it but it can be hard to guestimate the return especially given current times. In your position I would try to manage my own pension fund as there are plenty of fiddles that can maximise your tax free contribution.
13 January 2012, 06:37 PM
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Not a huge fan of pension schemes myself, would rather (& have) dump it & use the cash in hand to invest in something else. Yes I've lost the company payments albeit no guarantee that they're not just pissing my payments away of course. Ideal world is to negotiate a higher salary on basis that you won't ask them to contribute - they save, say, 9% contribution albeit pay you 5% higher salary.
Apols for slight thread hijack
TX.
Apols for slight thread hijack
TX.
Last edited by Terminator X; 13 January 2012 at 06:38 PM. Reason: typo
13 January 2012, 06:45 PM
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An unheard of proposition for a doctor to withdraw from a career average earnings based NHS pension scheme?
There are proposals to approximately double the pension contributions that doctors make over the next few years, plus working until 67 instead of 60, all to get the same pension, that is then uplifted by CPI not RPI. The NHS pension scheme is already I understand in surplus, which means it is paying out less than it is taking in, as a result of previous increases.
Due to efforts of the press and governments, there is now a public perception that doctors are overpaid, but I'm worse off in real terms than I was 10 years ago when there was a recruitment crisis. The initial gains from the new contracts have been eroded through extra conditions and work attached to the same payments year on year, plus we've already been frozen for I think 4 years now. There are many people who are real terms worse off than 10 years ago, but it is not what you expect reading the newspapers about fat cat GP incomes.
On the other hand in this environment I'm very pleased to have an interesting and reasonably secure job, but earning a fraction of what I read about in the Daily Mail.
The profession are discussing what to do about it. I thought Scoobynet was an interesting source of wide opinion on the topic. I'd not strike, and am not a member of a trade union anyway.
I'm simply thinking of withdrawing from the NHS pension scheme and that would freeze my existing benefits. Then I can keep the money (after tax of course), invest or spend as I wish, retire when I can afford it etc. If everyone pulled out of a scheme that is just going to be subsidising the treasury more, then presumably it would collapse.
We all need to accept a reduction in living standards, and all need to properly fund our retirement. Generally I support this government, but I cannot see how public sector pensions can be considered anything special when a profession gets less out than it is putting in and the balance goes to the treasury. Who would do that voluntarily?
It may be worth saying that as GPs are self employed we can get to keep our "employer's" as well as "employee's" superannuation. We have to pay income tax on it, but employees like Consultants if they left the scheme might be worse off.
The only reason left for me to go into a pension is if it subsidised in some way. It already isn't and in a few years will be the dramatic reverse and just another tax.
There are proposals to approximately double the pension contributions that doctors make over the next few years, plus working until 67 instead of 60, all to get the same pension, that is then uplifted by CPI not RPI. The NHS pension scheme is already I understand in surplus, which means it is paying out less than it is taking in, as a result of previous increases.
Due to efforts of the press and governments, there is now a public perception that doctors are overpaid, but I'm worse off in real terms than I was 10 years ago when there was a recruitment crisis. The initial gains from the new contracts have been eroded through extra conditions and work attached to the same payments year on year, plus we've already been frozen for I think 4 years now. There are many people who are real terms worse off than 10 years ago, but it is not what you expect reading the newspapers about fat cat GP incomes.
On the other hand in this environment I'm very pleased to have an interesting and reasonably secure job, but earning a fraction of what I read about in the Daily Mail.
The profession are discussing what to do about it. I thought Scoobynet was an interesting source of wide opinion on the topic. I'd not strike, and am not a member of a trade union anyway.
I'm simply thinking of withdrawing from the NHS pension scheme and that would freeze my existing benefits. Then I can keep the money (after tax of course), invest or spend as I wish, retire when I can afford it etc. If everyone pulled out of a scheme that is just going to be subsidising the treasury more, then presumably it would collapse.
We all need to accept a reduction in living standards, and all need to properly fund our retirement. Generally I support this government, but I cannot see how public sector pensions can be considered anything special when a profession gets less out than it is putting in and the balance goes to the treasury. Who would do that voluntarily?
It may be worth saying that as GPs are self employed we can get to keep our "employer's" as well as "employee's" superannuation. We have to pay income tax on it, but employees like Consultants if they left the scheme might be worse off.
The only reason left for me to go into a pension is if it subsidised in some way. It already isn't and in a few years will be the dramatic reverse and just another tax.
Interesting thread John. For obvious reasons this is a hot topic amongst friends and colleagues at the moment.
I must say I haven't fully understood the pension changes yet (have they even been confirmed?)
I never thought the day would come when I withdrew from the NHS pension scheme but it may now happen.
Like you I'm going to do the maths and it may well be that I'll be putting a lot more in then I can get out, especially if I were to die 'young' ie below 75.
I'll probably go one step further John. If the pension changes are very bad then I may well quit the NHS altogether and go fully private. The pension was one of the reasons I put up with all the sh9te that comes with working in the NHS (including an onerous on call in my specialty)
If the pension is radically changed then I'm offski mate. Privately I can earn in 1.5 days what they pay me for a weeks work in the NHS, it's a no brainer. Just do an extra day privately and that is my NHS income covered, and I don't have to do on calls or deal with the scum bags.
Interesting times...the NHS has had it's pound of flesh from me over the last 17 years, no longer though
13 January 2012, 06:51 PM
#11
Just a couple of points now and I'll come back to this thread.
As far as I am aware the NHS Pension scheme has no "pot of money" and therefore cannot be in surplus. The money I pay into my pension each month simply goes into the government coffers and is spent running the country. The NHS Pensions paid to those retired come from this pot basically in "real time"
Since the UK has no hypothecated taxes then the general public who pay taxes contribute in "real time" to the recipients of NHS pensions...
The other thing is that the NHS pensions revert to a career average in 2015 and since I spent many years in junior posts covering absent consultants and getting higher qualifications this will drag my pension down by multiple thousands of pounds per year.
Maybe the NHS have had their pound of flesh for the last 30 YEARS
Shaun
As far as I am aware the NHS Pension scheme has no "pot of money" and therefore cannot be in surplus. The money I pay into my pension each month simply goes into the government coffers and is spent running the country. The NHS Pensions paid to those retired come from this pot basically in "real time"
Since the UK has no hypothecated taxes then the general public who pay taxes contribute in "real time" to the recipients of NHS pensions...
The other thing is that the NHS pensions revert to a career average in 2015 and since I spent many years in junior posts covering absent consultants and getting higher qualifications this will drag my pension down by multiple thousands of pounds per year.
Maybe the NHS have had their pound of flesh for the last 30 YEARS
Shaun
Last edited by Midlife......; 13 January 2012 at 06:54 PM.
13 January 2012, 06:53 PM
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Agree TX, I hate the whole idea (I think they mainly exist to support the financial services industry), the only incentive for me is the employer's contribution, but because I'm self employed, I administer that.
Luan Pra bang, it is a career average scheme. The only gain I can see is tax deferral, but when you take the pension you still pay tax on it, albeit with IIRC higher personal allowances and at a lower rate.
Luan Pra bang, it is a career average scheme. The only gain I can see is tax deferral, but when you take the pension you still pay tax on it, albeit with IIRC higher personal allowances and at a lower rate.
13 January 2012, 06:54 PM
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Speaking to a friend who is a GP, it almost seems that the govnmt are trying to claw back the money the lost on renegotiating GP contracts a few years ago
my friend seemed to suggest the last government totaly cocked up the negotiations -- in the GP's favour especially re OOH working
my friend seemed to suggest the last government totaly cocked up the negotiations -- in the GP's favour especially re OOH working
13 January 2012, 07:01 PM
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opt out spend all and retire on state benefits with the odd day working private to top it up. I dont see why you would want to work hard pay more into a pension and get less out.
13 January 2012, 07:11 PM
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Deep, if I was in your situation in London then I would be most tempted indeed. The changes have not been confirmed, so I'm not deciding yet, but I'll be deciding before April if the changes are confirmed.
Shaun, the claim of surplus merits more investigation. Even though it operates as you say, the claim is that the net effect for doctors today is that more is being put in than is being taken out. For me, this factor is crucial.
Shaun, no additional years, I'm 37, I started working at 24 and as a GP at 28. The GP scheme has for years been career average. My wife has a few dog ends of private schemes, one frozen which is defined benefit and the rest all lumped into one now private pension, much of it in Japanese equities which have done terribly except for the strengthening of the Yen, so actually not bad in terms of returns, but overall it is worth naff all and she is 38. Our saving grace is that we saved about 5 1/2 times my gross annual income by last summer and then blew it all on a house. That and the share of my (modest) surgery building are our real retirement plan from here I think, plus whatever NHS pension scheme and whatever state pension is left by then.
It is my aim to have financial independence and never be poor again like my childhood. I doubt that will happen, but with the latest changes I need to revise my plans.
Shaun, the claim of surplus merits more investigation. Even though it operates as you say, the claim is that the net effect for doctors today is that more is being put in than is being taken out. For me, this factor is crucial.
Shaun, no additional years, I'm 37, I started working at 24 and as a GP at 28. The GP scheme has for years been career average. My wife has a few dog ends of private schemes, one frozen which is defined benefit and the rest all lumped into one now private pension, much of it in Japanese equities which have done terribly except for the strengthening of the Yen, so actually not bad in terms of returns, but overall it is worth naff all and she is 38. Our saving grace is that we saved about 5 1/2 times my gross annual income by last summer and then blew it all on a house. That and the share of my (modest) surgery building are our real retirement plan from here I think, plus whatever NHS pension scheme and whatever state pension is left by then.
It is my aim to have financial independence and never be poor again like my childhood. I doubt that will happen, but with the latest changes I need to revise my plans.
Last edited by john banks; 13 January 2012 at 07:19 PM.
13 January 2012, 07:21 PM
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13 January 2012, 07:29 PM
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Agree, but I've been thinking it is getting less attractive for some time following earlier changes, and momentum (as well as people always saying it was a crazy decision) encourages me to do nothing. Once it is confirmed I hope to have enough info to decide, but I don't have to do it immediately. However, I think there was talk of increased contribution rates from April, tapering in until 2015.
13 January 2012, 07:30 PM
#20
Speaking to a friend who is a GP, it almost seems that the govnmt are trying to claw back the money the lost on renegotiating GP contracts a few years ago
my friend seemed to suggest the last government totaly cocked up the negotiations -- in the GP's favour especially re OOH working
my friend seemed to suggest the last government totaly cocked up the negotiations -- in the GP's favour especially re OOH working
And the GPs didn't even ask for a payrise.
Unbelievable.
13 January 2012, 07:39 PM
#22
John
I see you are quite a bit younger than me as I'm 52.
Our circumstances are really very different as only pay off my mortguage when I'm 64 and have absolutely no savings.........long story.
My Pension isn't my priority at the moment, I was brought up in a two up-two down with an outside loo so even if I am completely screwed pension wise I don't think I'll be that poor........I'm still trying to get a family (6, 13 and 16 years) through life/ education / uni before my body packs in LOL
Shaun
I see you are quite a bit younger than me as I'm 52.
Our circumstances are really very different as only pay off my mortguage when I'm 64 and have absolutely no savings.........long story.
My Pension isn't my priority at the moment, I was brought up in a two up-two down with an outside loo so even if I am completely screwed pension wise I don't think I'll be that poor........I'm still trying to get a family (6, 13 and 16 years) through life/ education / uni before my body packs in LOL
Shaun
13 January 2012, 07:44 PM
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I understand the proposals include some protection for people within 13 years of retirement age on the old scheme, for the 1995 scheme that was 60.
13 January 2012, 07:46 PM
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Difficult call, I'm beginning to wonder about my pension too, I'm on a public sector pension as well but I'm paying in 11% currently and looking at that possibly going up to upto 14%, I'm certainly not in the part which are paying 2% in for their final salary pension, I do know one or two people who are pulling out now though and looking to invest in property instead, makes you wonder.
13 January 2012, 07:49 PM
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Property is still risky I think, but I was and still am less scared of it than anything else, and that probably includes the value of a state run pension in 30 years time.
13 January 2012, 07:58 PM
#26
John
I might just scrape into some protection but I wouldn't trust the Govenment to honour it.
I do not envy younger people than me who are making plans for their retirement, certainly I doubt if my children will have the standard of living we had in 2004, nor my level or retirement income for my contributions.....
Being old has one or two advantages, I guess it's cheaper to insure my scooby as well LOL
Just thinking, I don't think I can withdraw from my NHS pension. I think it's part of my contract.
Shaun
I might just scrape into some protection but I wouldn't trust the Govenment to honour it.
I do not envy younger people than me who are making plans for their retirement, certainly I doubt if my children will have the standard of living we had in 2004, nor my level or retirement income for my contributions.....
Being old has one or two advantages, I guess it's cheaper to insure my scooby as well LOL
Just thinking, I don't think I can withdraw from my NHS pension. I think it's part of my contract.
Shaun
13 January 2012, 08:05 PM
#28
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John
I might just scrape into some protection but I wouldn't trust the Govenment to honour it.
I do not envy younger people than me who are making plans for their retirement, certainly I doubt if my children will have the standard of living we had in 2004, nor my level or retirement income for my contributions.....
Being old has one or two advantages, I guess it's cheaper to insure my scooby as well LOL
Just thinking, I don't think I can withdraw from my NHS pension. I think it's part of my contract.
Shaun
I might just scrape into some protection but I wouldn't trust the Govenment to honour it.
I do not envy younger people than me who are making plans for their retirement, certainly I doubt if my children will have the standard of living we had in 2004, nor my level or retirement income for my contributions.....
Being old has one or two advantages, I guess it's cheaper to insure my scooby as well LOL
Just thinking, I don't think I can withdraw from my NHS pension. I think it's part of my contract.
Shaun
Shaun, I can't believe that can be part of a contract. The pension is voluntary
13 January 2012, 08:08 PM
#29
DingDongler
To be honest I've never questioned it.....the pension contribution has been coming out of my salary since 1982 when I started as House Officer at the London Hospital in Whitechapel.
Like you I could earn my monthly salary by working a week in Private Practice but for a lot of reasons that will never hapen LOL
Shaun
To be honest I've never questioned it.....the pension contribution has been coming out of my salary since 1982 when I started as House Officer at the London Hospital in Whitechapel.
Like you I could earn my monthly salary by working a week in Private Practice but for a lot of reasons that will never hapen LOL
Shaun
13 January 2012, 08:12 PM
#30
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isn't that the back story behind all this pension reform
i.e. this government renegotiating a done deal, the previous government (Gordon Brown) dramatically changing the pension rules
how can you "plan" when the rules change at a whim
i.e. this government renegotiating a done deal, the previous government (Gordon Brown) dramatically changing the pension rules
how can you "plan" when the rules change at a whim