Withdrawal Of Pension

[bobbie22]

I have an NHS pension. Last week I enquired about withdrawing it. Apparently, this is not possible with this pension. Is this correct? My apologies for not using the proper financial words. Any advice or info would be appreciated. Thank you.

[twix123]

Is this a Final Salary scheme pension? If so you cannot make an early withdrawal of your payments.

[bobbie22]

Yes it is a final salary pension as I am retired

[twix123]

If you've already retired, are you receiving benefits under the pension scheme; or have you retired early and not yet reached the age at which you could start drawing your pension?

[bobbie22]

Night twix. Will be back here tomorrow

[bobbie22]

Yes, I am quite old, and drawing my pension

[twix123]

If you're drawing benefits under the pension scheme, one presumes that your annuity has already been purchased and therefore cannot now be substituted for a cash sum, if that is what you intended with your original question.

Goodnight bobbie.

[Old_Geezer]

As it was final salary it was a defined benefit pension. I think only defined contribution pension funds are eligible for draw down consideration.

[bobbie22]

Thanks for your answers. It sounds very complicated to me. I telephoned the pension company and they told me I could not have this money, but I did not understand why. I have looked on the net, but cannot find an answer. Do I understand that because I am receiving a pension already that I cannot withdraw my pension pot?

[Peter Pedant]

Hi Bobbie

I am also on an NHS pension- and yes I thought withdrawal meant " stopping taking the pension and starting to recontribute " which is kinda withdrawal

You mean draw-down

Your pension whilst being one of the best around also is in a special position - Ernest Bevin " The great secret about the NHS pension pot, is there is no NHS pension pot " [ 1948 ]. The govt spend all the NHS contributions in the financial year that they collect it, and in this year the contributions exceed the disbursements ( to you and me ) by two billion.

You have a notional pension pot - twenty times your annual pension + plus whatever your lump sum was. In your day if you are that old, the multiplicator was twelve.

I can't imagine that you can drawdown against a notional pot ( or else we would all do it ) I will look on the internet

[furrypusscat]

The chancellor implied in the budget, the possibility that from next April, the option of selling your annuity may be brought in for those who have already bought one and who are already drawing their pension but whether this would apply to the NHS pension scheme I don't know. If you have already been drawing your pension for some time, then you may not get much back anyway even if it did apply. I agree the regulations are not simple to follow and you would be advised to take financial advice nearer the time.

[bobbie22]

I appreciate your answers, and thanks. What you are saying, peter pendant, I think, is that there is no such pension pot. Words like drawdown I do not understand.

[Peter Pedant]

NHS pension site
http://www.nhsbsa.nhs.uk/Pensions/DrawDown.aspx

draw down uses ad draw early and partially and before retirement

and no you cant do that.

members guide here
http://www.nhsbsa.nhs.uk/Pensions/Documents/Pensions/SD_Guide_V3_-_06.2009.pdf

I think by withdrawal you mean a further lump sum ( further to your the lump sum you had when you retired ) in return for a smaller monthly pension ?

No you have vested your pension and you cant do that

You can only draw down unvested pensions ( I think - I would like to find a statement on that, however the draw down is taxed ( at my case 40% ) so I have never thought about it ) .

[bobbie22]

Will the notional pension annuity purchased for me ever run out? I must sound pretty stupid I know.

[Peter Pedant]

Yes I remember that too Furry P C

The new rules have not been drawn up
and I wondered how that bit would work
too early to tell at present

Bobbie - drawdown for the current NHS pension is simply explained here
http://www.nhsbsa.nhs.uk/Pensions/DrawDown.aspx

The technical words have to be used in their technical sense - or else no one can have a sensible conversation about the same thing -

[bobbie22]

Sorry I called you peter pendant instead of pedant. Apologies. Thanks for your very helpful answers

[bhg481]

No, the terms of your pension state that you will receive it as long as you live. If it's the same as other civil-service type pensions, your partner may receive half its income after your death if you die first.

[bobbie22]

Bhg, Thanks for that info.

[Old_Geezer]

No you don't sound stupid. Pensions are varied, confusing, and can be quite complicated. And I suspect Peter would appreciate having such a swinging name.

[Peter Pedant]

No the notional pension pot will never run out

when you vested ( = took ) your pension [ 25% as lump sum and the rest as a monthly payment which rose year on year ] you signed a contract and this cannot be varied ( xc by direct parliamentary legislation ) by the government.

Hence my attitude of " you have a wonderful pension, why do you want to a=r=s=e around with it ? "

The changes of 2008 ( to contributions not for you ) where the contributions went up were designed to head off the cross over point where the contributions do not pay for the disbursements. This was gonna occur 2026.
At present the conts exceed the costs by two biliion. ( a year ). Further changes to the unvested pensions in 2016

besides you and I, everyone else reading this already thinks we are living off their taxes - we arent we are living off the current NHS contributions to the pension AND there is something left over ( £2bn in 2015 )

[bobbie22]

The reason I was thinking of messing around with my pension was so that my sons could have it after I die, otherwise it will be lost. Obviously this will not happen. I agree it's an excellent pension, but as you say, we paid for it, and paying tax now.