Why and how to keep an eye on your NHS Pension

The halcyon days when you could join the NHS Pension Scheme and not look at it until your 60th birthday was in sight are seemingly long gone.

You now have to keep a watchful eye on your pension as if it was a small child. How can you possibly do this when you’re not a financial expert and you have so many other things to think about and do?

Your NHS Pension: Why you need to keep an eye on it

Follow these 5 simple tips and this sometimes confusing, often frustrating task should be a little easier to accomplish.

Tip 1: Keep track of how much your NHS pension is worth

The current value of your NHS pension, and some of the figures used in the calculations, is shown on your Total Reward Statement (TRS) which is now updated twice a year. To access your TRS online, go to www.totalrewardstatements.nhs.uk.

Using the figures on your TRS, we can project what your pension and any associated tax liability may look like until you retire. Is this a crystal ball for your NHS Pension? >

Tip 2: Know what else your NHS pension gives you

Sadly, many doctors and dentists are unaware of the other benefits that their NHS Pension provides. Valuable benefits such as:

  • An Ill Health Retirement Pension which is a complicated calculation based on the number of years you have worked, the severity of your illness and how it affects your ability to work.
  • Life Cover (death in service) for spouses, children, and even those who have been in a relationship for longer than two years and who are financially dependent.

Make sure your loved ones know what they will be entitled to when you die.

Who gets your pension benefits?

If you are married or in a civil partnership and you want your pension benefits to go to your spouse / partner, you don’t need to complete a pension nomination form. Your spouse / partner will automatically get your pension benefits when you die.

If you are not married or in a civil partnership, you need to complete the appropriate pension nomination form(s) which you can get from either the NHS Pensions Agency or your financial adviser.

Tip 3: Be aware of all the recent legislation changes

The last few years have seen a steady stream of legislative changes to pension and tax rules. Do you, for example, know what your pension age is now?

Many medics think that their NHS retirement age is 67, but in fact it is:

  • Age 60 for members with benefits held in the 1995 NHS Pension Scheme
  • Age 65 for members with benefits held in the 2008 NHS Pension Scheme, and
  • Linked to your state pension age for members with benefits in the 2015 NHS Pension Scheme Check your state pension age >

The current timetable for increases in the state pension age is also not set in stone. There is speculation¹ that it could change, making age 70 the state retirement age for those now in their twenties.

My point is that, even if the NHS Pension Scheme doesn’t change much, the legislation surrounding it does. I can’t think of a better way to stay on top of these changes than following this blog!

Tip 4. Make sure your service history is correct

Your pension is based on your salary and your service history. The NHS Pensions Agency probably have your salary correct but do they have the correct service history for you?

It’s worth checking that they do…and don’t leave it to the last minute! The NHS Pension Scheme has literally thousands of members; mistakes do happen.

Tip 5: Have a plan!

When you are juggling the other essentials in life – work, family commitments, raising children – keeping track of your pension can, at times, feel like a bridge too far. Yet working through choice and not necessity can give life a whole different feel and meaning.

To be in that fortunate position, you need to know what your expected pension is likely to be, what your expenditure over the years is going to be, and then make plans.

For those plans to be realistic and not wishful thinking, you will very likely need to get some help and advice. The sooner the better too so that you maximise all the opportunities and allowances you have available to you. I can even recommend an excellent financial advisory company…one that specialises in providing independent financial advice to doctors and dentists!

Have the facts and figures of your NHS Pension changed since you last reviewed it and how long ago was that? Let us know by adding a comment below.

¹ FT.com

2 thoughts on “Why and how to keep an eye on your NHS Pension

  1. simon

    Does opting out of/deferring the 1995 NHS pension scheme (to avoid exceeding the tapered annual allowance) a few years before retirement remove one’s access to the tax-free lump sum on retirement? Or does it block the ability to commute one’s pension to increase that lump sum? This is implied on a video on the NHS pensions website.

    1. Owen Beswick

      Hi Simon

      The short answer is “no” it doesn’t remove your entitlement to a lump sum or your ability to commute.

      Best wishes


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