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? Especially with all the additional homeschooling and COVID related working patterns, you are having to deal with.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 and our clever ‘little’ retirement estimation process we can project what your pension and any associated Annual and Lifetime allowance tax liability may look like until you retire.

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 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.

The one potential exception is locum GPs. See our article: GP Locums: Will you get your death in service benefit? for further details, if you are a locum.

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.

Our article ‘The NHS death in service benefits facelift’ explains recent changes to NHS Death in Service.

Tip 3: Be aware of all the recent legislation changes

The last 10 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.

The recent finding that the changes made in 2015 to the Firefighter’s pension scheme were age discriminatory will undoubtedly have a knock-on effect on the NHS pensions scheme, so there will be further complications regarding normal retirement ages to come! 

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 has 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!

When did you last review your NHS pension, and have you checked the facts and figures? Let us know by adding a comment below.

¹ FT.com

6 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

  2. Hannah Newens

    Hi my state pension age is currently 68. I’m a GP and can’t see myself working for that long, but I have been told you can’t take early retirement on the scheme without huge penalties on your pension, is this true? And if so is it better to reduce contributions and put some somewhere else for retirement?

    1. Owen Beswick

      Hi Hannah

      I would suggest that you meet with a Legal and Medical adviser! There are “penalties” if you take your pension before State Retirement Age. However, these penalties need to be put into context. You could still have a very generous/large pension at the age of 60 even with a penalty imposed. So the “penalty” may not really be a problem.

      As for reducing contributions – that isn’t an option at the moment. You pay a set percentage dependent upon the amount you earn – you can’t choose how much income is assessed and contribute accordingly. Please do get in touch – I think you may be surprised at what pension you are likely to receive, even if you retire early at 60!

      Best wishes, Owen

  3. Shona Hughes

    I would like advice on
    1.Yes, I want to transfer my deferred benefits fro the 2008 section to the 2015 scheme. Or 2. No, I do not want to transfer my deferred benefits from the 2008 section on the NHS pension scheme to the 2015 scheme
    I would like to know the better option and how much better off I would be when I retire in which scheme.
    Look forward to your reply

    1. Owen Beswick

      Hi, there

      This is actually quite a complex question, and actually, an individual’s personal circumstances will also influence any decision. As such, I think that you should contact an adviser (preferably Legal and Medical) to talk this through.

      Just as a start – the 2015 scheme has a pension age aligned to State retirement age; whereas the 2008 scheme is 65. This may or may not be an important factor, but it needs to be considered! So it is a case of “one size does not fit all” I’m afraid when considering the merits 2008 or 2015!

      Please do get in touch!
      Best wishes, Owen


Leave a reply

Your email address will not be published. The name, email and comment fields are required.

We use cookies to ensure that we give you the best experience on our website. If you continue we'll assume that you are happy to receive all cookies from this website. Read more Close