NHS Pensions: A Second Bite Of The Cherry

You may have noticed there’s another round of the “Choice” exercise which gives you the option to move from the 1995 Section of the NHS Pension Scheme to the 2008 Section.  This is known as Choice 2.

It has been widely reported that uptake of the switch first time round was minimal ; the main reason for this was said to be the increase of the Normal Retirement Age from 60 to 65.

So why would you want to consider it the second time around?

Initial guidance issued as part of the consultation process for the up and coming 2015 changes to the NHS Pension Scheme suggests that some members may need to reconsider their options.

If you didn’t opt to switch first time around and will not qualify for full protection, Choice 2 is aimed at you.

Under the rearrangement of the scheme, you will  accrue “Preserved Rights” for your existing pension benefits depending on whether you are a member of the current 1995 or 2008 sections. This is to ensure that the pension benefits that you have already built up are not affected by the new 2015 scheme. You can access these “Preserved Rights” without reduction as long as you claim the benefits at the normal retirement age, which is aged 60 for the 1995 section and aged 65 for the 2008 section.

However this is where the “Choice 2  Cherry” may start to taste a little sweeter, in that 2008 section members can take their entitlements and continue to contribute to, and thereby accrue benefits in, the 2015 Scheme. There will be no equivalent option for the 1995 section members. Therefore if you draw your benefits under the 1995 section and continue working in the NHS, you will not be able to continue contributions to the 2015 scheme.

Obviously before making any decision of this type you must consult an appropriately qualified Independent Financial Advisor. Please contact us for further details.

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