Hello the 'workers',
Both my children work in the NHS and my son has received his prediction which is probably mathematically correct but the argument is seriously flawed as it dose not present the full picture viz:
Case:
He entered the NHS age 24 therefore will receive 36/80 (final pay) aged 60 (he is also purchasing added years which the prediction chooses to ignore so beware those of you who are purchasing 'added years').
If he tranfers to the new scheme he will accrue 41 yrs service but the maximum for pension is 30 at 65; therefore he would receive 30/60 (average of last 10 yrs) aged 65.
Ignoring the difference between final/10yr average although very important.
The flaw in the prediction is 'there is no statement as to your pension if you remain in the old scheme but work till age 65; the prediction basically compares retiring at 60 (old) or new (65)
If he works till 65 he would receive a pension of 41/80 (old) which is greater than 30/60 (new), and final pay not 10yr average. It is my experience that few people realise the accrual age rules in the old scheme, namely a maximum of 40 yrs at 60 but also a maxium of 45yrs at 65.
Things will change post Hutton but I believe it inevitable that the pension age will increase to 65 probably phased (cf state pension age for women).
If you are likely to accrue 40-45 yrs at 65 then the old scheme is better, if you are going to accrue ~ 30 yrs at 65 then the new is probably better; I accept that the new scheme may be better in cases of early retirement on health or redundancy since the accrual is 1/60ths.
Is the above scenario correct? or is my thinking flawed.
I would appreciate members views.
John Martin (retired)