1/ A thread [1/2]about your NHS pensions, tax & the age discrmination “McCloud” case👇
OK this is complicated stuff, Im going to take you through it step by step. But its important, and will affect your pension, so buckle up and pay attention!
Please share & RT/share awareness
2/ To understand “McCloud” let's rewind to yesteryear- you gave a lifetime of public service & (deservingly) got a good “final salary” pension.
Broadly in 1995 (or “legacy”) pension scheme, each year you got 1/80th of your “final salary” as a pension & 3/80th a tax free lump sum
3/ Back in yesteryear, pensions cost 5 or 6% gross salary. For example you worked 37 years & final salary £120k, pension= 37/80ths x £120k=£55,500. You would get this at normal retirement age- 60yrs & it would be index linked to inflation, plus a lump sum (3/80ths) of £166,500
4/ So roll on 2006-08 & government were worried about affordability of the scheme. Life expectancy was increasing so people were in retirement longer. So they made the scheme more expensive & introduced a new “2008” section for new entrants. The 08 scheme removed the lump sum
5/ Existing 95 members had a “choice” to move to ‘08’ scheme. It had a higher retirement age (65) but paid a higher “accrual rate” (60ths not 80ths). Rather than “final salary” (best of last 3 yrs) it was based on a more complicated “reckonable” pay based on best 3/10 yrs pay.