How often do you think about your pension? Are you worried about all this talk of pension reform?
I am. I’ve read the proposed changes and, as juniors, we have the most to be worried about.
Most of us are fairly early on in our NHS careers, some of you are probably in the same position as me; deciding whether to migrate onto the new scheme as part of the ‘choice exercise’.
That decision appears to be rather futile given the transformational changes being proposed by the government. Lord Hutton has recommended that the normal pension age should increase to as much as 68 years old and then continue to be linked to future increases in the state pension age. The government has endorsed this recommendation and therefore we face the real prospect of being victims of these changes. So much for my dreams of retiring at 60 on a full pension!
Instead I can expect to work an extra 8 years to 68.
It’s not just a matter of lost years. It’s a matter of money. Those 8 years could equate to an extra £140,000 in contributions according to figures seen by the BMA. It could also equate to a loss of up to £400,000 in pension payments during that time.
The BMA pensions department are crunching the numbers, and if all the government proposals are pushed through, then I as a young, soon-to-be GP could actually be better off with a private pension. If I can earn a better rate on the open market with no employer contribution, why should I bother propping up a scheme delivering a surplus to the treasury?
Please don’t take this as financial advice – I’m a doctor not an accountant, and the BMA are certainly going to be fighting hard over this to prevent a worst case scenario. But, we all need to have our collective ears pricked up so we are alert to this massive pensions pothole we are about to fall into.
Apparently we are on a gold plated pension scheme. I don’t know about you, but the shine has definitely rubbed off from where I am standing right now.
For more on why you should be worried about your pension watch this video recorded at the BMA’s Annual Representative Meeting: