Author Topic: UK Mustachians: NHS Pension Scheme and early retirement  (Read 923 times)

poorboyrichman

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UK Mustachians: NHS Pension Scheme and early retirement
« on: October 29, 2014, 06:48:43 AM »
Any UK Mustachians here with specific experience/understanding of the current 2008+ NHS pension scheme?

I joined the scheme in June this year, and since getting my finances in order have been thinking a lot more about ER. The way the scheme is set up means you will be heavily penalised if you retire early and the motivation for this is obvious (if your not earning, your not paying in)

How does the NHS pension scheme fit in with your plans for early retirement, do you continue to make payments until you ER and then take it at age 65 when you won't be penalised or are you opting out and investing privately?

At the moment 7.1% of my gross wage is rolled into the scheme automatically each month and this is due to increase over time (the government keep moving the goal posts lately and fear eventually the scheme will be worthless anyway). I don't feel the deduction at all, and am living fine without it, but it's 127 I could be investing elsewhere. Not sure if the scheme makes sense in the case of ER. Any opinions?

For any non-UK mustachians that are interested in what UK public sector retirement plans look like click here --> http://www.nhsbsa.nhs.uk/Documents/Pensions/SD_guide_-_Online_(V10)_04.2013.pdf<--

Note, the minimum retirement age on the scheme is 55 (meaning you cannot draw from the scheme until 55). Obviously as 7% of income is paltry and an income of 25,000 would only net a pension of 11,000 at the age of 65 I clearly need to be thinking about own savings too if I don't want to be a pauper in my old age. Not sure what all the other staff are thinking with their tiny pensions, I hope they all have a backup plans! Obviously this isn't taking in to account my career progression, I don't plan to be earning 25k for the rest of my life or working to 65!)



Cheers,
RBPM
« Last Edit: October 29, 2014, 07:17:55 AM by poorboyrichman »