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Making the most of your NHS pension

Without doubt, because of the generous income tax relief on your contributions, a pension is a highly tax efficient way to save for retirement.


As a doctor, you are fortunate to have access to what is still regarded as one of the country's best occupational pensions - the NHS Pension Scheme.

It offers you an excellent package of benefits including:

  • Pension benefits linked to your length of service and earnings
  • Index linking to ensure your retirement income benefits keep pace with inflation
  • Early retirement at age 50 or 55 depending on which scheme section you're in, and subject to other qualifying criteria
  • Taking up to 25% of the Capital Value of the pension as a tax-free lump sum, subject to certain criteria
  • Immediate life assurance cover
  • Benefits for your dependents should you die
  • Ill health benefits should you have to retire on health grounds

Your NHS pension is a key part of your overall remuneration as a doctor. It is important you understand it and that you make the most of it.

Getting to grips with your NHS pension is not generally straightforward, which is why so many doctors approach Chase de Vere for advice.

  • It is complex with three different variations to the scheme, with different calculation bases and rules. Working out where you are and where you're likely to be can be challenging.
  • It has limits. Current legislation means that you can only benefit from tax relief on deemed contributions of up to £40,000 annually. The government has recently announced the introduction of a tapering of an individual's Annual Allowance (AA) which was introduced in April 2016, where their Adjusted Income is above £150,000 and their Threshold Income is above £110,000. Anyone meeting these two criteria will have a reduced limit on the amount of tax-efficient pension savings from 2016/2017.The AA will be reduced by £1 for every £2 of Adjusted Income above £150,000, subject to a minimum AA of £10,000. This means that where an individual has Adjusted Income above £210,000 they will be subject to a reduced £10,000 AA.

    In addition you are limited as to the total amount of pension savings you are allowed to build up over your lifetime. This reduced from £1.25m to £1m in April 2016.  This sounds like a lot, but these limits are more easily reached than you might think. Breach them and you face punitive tax charges. As incredulous as it seems, some doctors have chosen to leave the NHS scheme for this reason.

  • It is subject to constant tinkering. One of the latest changes was to link the scheme's normal retirement age to the state pension age, so an increase from age 60 to between 65 and 68 depending on when you were born. While not all doctors are affected, younger doctors certainly now face the prospect of having to work longer for less pension benefits.

There are a number of excellent (free) resources available to you, particularly if you want more information about drawing benefits from your NHS scheme. These range from the NHS pension website http://www.nhsbsa.nhs.uk/Pensions.aspx to the BMA's own pension team http://bma.org.uk/pensions

Personal, comprehensive retirement plans from Chase de Vere

If you would like individual advice and personal recommendations, as opposed to general guidance, then our specialist independent financial advisers would be delighted to assist.

Equipped with an intimate understanding of the workings of the NHS scheme, our financial advisers also have a wider financial knowledge and are able to integrate your other assets into your overall retirement plan, including any personal pensions, your property and other savings and investments.

A Chase de Vere independent financial adviser will help you:

  • Establish your current position, and forecast potential future benefits
  • Navigate the tax implications of exceeding pension contribution limits
  • Manage any personal pensions effectively
  • Consider other types of tax efficient investment to save for retirement
  • Establish pensions for other family members
  • Keep your retirement plan on track through to your retirement
  • Plan for an early or a partial retirement

Call us today on 0345 609 2008 or click here and we'll call you back to book your free initial consultation.

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“Chase de Vere pride themselves on maintaining high levels of knowledge, not only around pensions but also medical career paths and other relevant areas in order that they can offer tailored and specialist independent advice to their clients.”

Professor David Sowden