I opted out from NHS pension for various reasons (as an IMG). I think each person should always think this through. I take my contributions and invest them elsewhere: 1) Pension age at 68 is way too high. My ethnicity and background, we rarely live beyond 70 years for males. I believe, we as humans overestimate how long we can live. Am I working for 40 years to reap 3-5 years of pension pay? 2) I am from Bahrain. NHS does not allow me transfer my UK pension to Bahrain. Please check if your country is eligible. I do understand that you can keep it in the UK and withdraw it at 68 or so. 3) Lack of control over my pension pot is terrible in my opinion. I am spending lots of time learning how to invest and making better investments that will suit how early I want to retire (on my own terms). 4) I cannot tie my fate with any government. We are at the mercy that the government won't change the rules in few years to make retirement age 70+. In which case I will never get my money. The trend of changes are to the worst (learning from historical changes in pension in the UK). The risks I am taking is that I am losing on "guaranteed" money and "ease of mind". I am not really at an ease of mind when I start thinking that the current pension will benefit me for a couple years at the end of my life, at best. Let's say I reach 70 years old and I can see my frailty is inevitable. If I have control over my investment, I can easily pay myself x3 or x4. I have full control.
Fair enough. Sounds like you've given it a lot of thought. It's really important for everyone to carefully weigh what is the best option for them. Thank you for sharing your experience.
This is really great stuff. It is clear that most 'new' IMGs who leave the scheme are largely unaware of the benefits they signed against. Next would be how to increase my Pension Contributions as a LED.
That's correct! The NHS Pension is index-linked, with CPI revaluation ensuring it grows over time. While CPI may not always match the true inflation rate, it still provides a level of protection against the rising cost of living. One advantage is that it offers a predictable and secure income in retirement, which can be a cornerstone of financial stability. However, understanding its limitations is essential for comprehensive long-term financial planning.
I’m a bit unclear with what the situation is for GPs. Am I right to think that at the point of completing your training and taking up a GP post with a Surgery, you are no longer able to contribute to the NHS pension scheme?
Yes! That's correct. Salaried GPs, GP Partners and even self employed Locums in some jobs can qualify for the NHS Pension. However, Locums working via a Limited company are not eligible to contribute. It is always worth confirming with any new employers. Some organisations like CICs and OOH services do not give you access to the NHS Pension.
Will state pension be mince tasted? Does this mean at retirement, one gets both NHS pension and state pension? Does having NHS pension disqualify one from getting the state pension?
Excellent questions! Currently, there is no means-testing to the state pension, so one can get the full amount if one has at least 30 qualifying years of national insurance contributions or credits. Other benefits available in retirement, such as pension credit, are means-tested
No. The NHS Pension is completely separate from the State Pension. You will normally get a separate basic State Pension as well as your NHS pension. The NHS pension is more desirable for obvious reasons as stated in the video but you can get state pension as well as other pension e.g. private pension like SIPP if you have one. Hope that helps❤
For every £80 you save into a pension, the government adds £20. If you’re a higher rate taxpayer, you can claim back an additional £20 via your self-assessment tax return.
With Scheme 3, payment of pension funds will run in correspondence of the eligible pension age. Very likely many people in this scheme will be unable to access this pension until 69/70 as these are expected changes. Do you think this therefore makes it less lucrative?
Nice points. But i still dont get the idea of saving for 2o to 40 years and cacessing the money on retirement. That money can be used to invest in assets like buying a house, which you can then sell, and live off the proceeds when you retire.
Thanks for your comment! I get where you're coming from. Investing in assets like property can definitely be a good strategy for some, but the NHS pension offers guaranteed, inflation-linked income for life, which is hard to match elsewhere. It's about balancing both-using some money for investments now while also securing a reliable income for later. The key is understanding how both can work together for your long-term goals!
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I opted out from NHS pension for various reasons (as an IMG). I think each person should always think this through. I take my contributions and invest them elsewhere:
1) Pension age at 68 is way too high. My ethnicity and background, we rarely live beyond 70 years for males. I believe, we as humans overestimate how long we can live. Am I working for 40 years to reap 3-5 years of pension pay?
2) I am from Bahrain. NHS does not allow me transfer my UK pension to Bahrain. Please check if your country is eligible. I do understand that you can keep it in the UK and withdraw it at 68 or so.
3) Lack of control over my pension pot is terrible in my opinion. I am spending lots of time learning how to invest and making better investments that will suit how early I want to retire (on my own terms).
4) I cannot tie my fate with any government. We are at the mercy that the government won't change the rules in few years to make retirement age 70+. In which case I will never get my money. The trend of changes are to the worst (learning from historical changes in pension in the UK).
The risks I am taking is that I am losing on "guaranteed" money and "ease of mind". I am not really at an ease of mind when I start thinking that the current pension will benefit me for a couple years at the end of my life, at best.
Let's say I reach 70 years old and I can see my frailty is inevitable. If I have control over my investment, I can easily pay myself x3 or x4. I have full control.
Fair enough. Sounds like you've given it a lot of thought. It's really important for everyone to carefully weigh what is the best option for them. Thank you for sharing your experience.
This is really great stuff.
It is clear that most 'new' IMGs who leave the scheme are largely unaware of the benefits they signed against.
Next would be how to increase my Pension Contributions as a LED.
Have just forwarded this video link to a friend who spoke to me about opting out of the NHS pension scheme
You must be a great friend!😀
Thank you
I dont think the nhs does keep up with inflation. They give cpi revaluation for each year, that is not the true inflation rate.
That's correct! The NHS Pension is index-linked, with CPI revaluation ensuring it grows over time.
While CPI may not always match the true inflation rate, it still provides a level of protection against the rising cost of living.
One advantage is that it offers a predictable and secure income in retirement, which can be a cornerstone of financial stability.
However, understanding its limitations is essential for comprehensive long-term financial planning.
I’m a bit unclear with what the situation is for GPs. Am I right to think that at the point of completing your training and taking up a GP post with a Surgery, you are no longer able to contribute to the NHS pension scheme?
No, GP contributes to the NHS pension.
Yes! That's correct. Salaried GPs, GP Partners and even self employed Locums in some jobs can qualify for the NHS Pension.
However, Locums working via a Limited company are not eligible to contribute.
It is always worth confirming with any new employers.
Some organisations like CICs and OOH services do not give you access to the NHS Pension.
Will state pension be mince tasted? Does this mean at retirement, one gets both NHS pension and state pension? Does having NHS pension disqualify one from getting the state pension?
Excellent questions!
Currently, there is no means-testing to the state pension, so one can get the full amount if one has at least 30 qualifying years of national insurance contributions or credits.
Other benefits available in retirement, such as pension credit, are means-tested
No. The NHS Pension is completely separate from the State Pension.
You will normally get a separate basic State Pension as well as your NHS pension. The NHS pension is more desirable for obvious reasons as stated in the video but you can get state pension as well as other pension e.g. private pension like SIPP if you have one. Hope that helps❤
For every £80 you save into a pension, the government adds £20. If you’re a higher rate taxpayer, you can claim back an additional £20 via your self-assessment tax return.
With Scheme 3, payment of pension funds will run in correspondence of the eligible pension age. Very likely many people in this scheme will be unable to access this pension until 69/70 as these are expected changes. Do you think this therefore makes it less lucrative?
That's a keypoint to consider and a risk with the NHS Pension. Thank you for your contribution!
Very useful… I’m definitely staying out. Thank you!
I meant staying put…😢😊
Sounds like a good plan! 😂
I'm glad it was useful! Thanks for your generous comment
Fantastic video and very enlightening. Thank Andy.
Glad you enjoyed it! Thanks for your kind comment
Very good use of my 18mins. I opted out last year. I should go back next month
Sounds like a great plan😅 Thanks for sharing!
Do you have the opt in form or any idea how I can download it?
great video as Always ND
Glad you enjoyed it. Thanks!
Best pension breakdown
Thank you!
Nice points. But i still dont get the idea of saving for 2o to 40 years and cacessing the money on retirement. That money can be used to invest in assets like buying a house, which you can then sell, and live off the proceeds when you retire.
Thanks for your comment! I get where you're coming from. Investing in assets like property can definitely be a good strategy for some, but the NHS pension offers guaranteed, inflation-linked income for life, which is hard to match elsewhere.
It's about balancing both-using some money for investments now while also securing a reliable income for later.
The key is understanding how both can work together for your long-term goals!
Only a fool would not contribute to this pension
Some people are ineligible though