Are you due a ‘second bite lump sum’ of your NHS pension?

Not a term you have heard of before? I’m not surprised. It’s a term given to an additional pension payment once in receipt of your NHS pension scheme upon retirement. It can give rise to additional income and possibly a further tax-free element that may be paid to you in the April following your retirement.

Does your NHS pension owe you a second bite lump sum?

Are you eligible for a second bite lump sum?

If you have not been awarded your full pension there are a number of reasons or circumstances.

For instance…

1. The pensions agency are not in receipt of the full information. It may be that you retired prior to your trust/CCG providing up to date information on your income. This is more common for GP’s as the information is often submitted much later as the accounts have to be compiled. Once in receipt of the information, you are entitled to additional benefits or a “second bite”.

2. You may be entitled to a higher tax-free lump sum. If a member left the scheme on 30th September 2011 and retired the following year, The lump sum and pension would be payable on the 1st October 2012, and it will have received the proportionate indexation between October 2011 and April 2012. The lump-sum would still be due an increase in respect of the period between the pension increase in April 2012 and the retirement date in September 2012. The “second bite” will be payable in April 2013. 

3. It is possible that the basis of the calculations needs to be checked. Seemingly small details can make a big difference. For example, if you are a member of the 1995 pension scheme, and your best year was not your last year’s pensionable pay, it may lead to incorrect calculations.  

Or, if you were a member of the 2008 pension scheme and your best three years in the last 10 were not the last three on your last day of service.

Lifetime allowance

This complicates matters as it could exacerbate your lifetime allowance position or potentially push you into a position giving rise to further tax liabilities. If this arises your annual allowance, and thus possible tax will need to be recalculated. It can be common practice for the indexation to be frozen whilst this is resolved.

Annual allowance

You would also need to request a new annual allowance statement as this could also be impacted.

What do you think? Are you eligible?

If you think you may be affected and due a ‘second bite’ of your NHS pension we suggest either contacting the NHS pension scheme directly or, of course contacting your Legal & Medical Adviser.

This is often a nice surprise for many on retirement, one that is normally welcomed providing it doesn’t cause too much of an administrative burden!

2 thoughts on “Are you due a ‘second bite lump sum’ of your NHS pension?

  1. Dr David Andrew Royle

    How long should it take for NHS pensions to award a revised pension?
    I knew as a retired GP that NHS pensions had estimated my final two years of superannuable earnings and once I knew the correct figures I was told that PCSE need to complete and send AW171 forms. After some trying I did find a very helpful person at PCSE who admitted they had not done this and proceeded to complete the forms and send them to NHS pensions.
    I have confirmation they received them on 10/6/20 but I am still waiting!

    1. Owen Beswick

      Hi there,

      In my experience pension claims can take up to three months. To be fair it’s usually quicker than this but not necessarily by much!

      Best wishes


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