It is now more important than ever to keep up to date with your NHS pension. But how, and what do you need to be aware of?

Follow these 5 simple steps to make this task less frustrating and easier to keep up to date with your NHS Benefits.

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

Each year your NHS Pension Benefit Statement will be available on the SPPA Website, so make sure you have registered - click here if you have not already done so.

Once registered you will receive various online services such as being able to download your most up to date NHS Pension Benefits Statement, which will let you know what benefits you have accrued up to the last tax year in all sections of the NHS Pension you have and are currently a member of. And, you will be able to see on these statements how your benefits are accruing against the current Lifetime Allowance (LTA).

You can also request an NHS Pension Annual Savings Statement, which will allow you to see the information that the SPPA hold, showing how much of your previous year’s annual allowances you have used and are available to carry forward should you have need to.

Using the figures on your Annual Benefit Statement we can provide you with a retirement estimation by what your pension and any associated Annual and Lifetime allowance tax liability may look like until you retire.

Step 2: Know what else your NHS pension gives you

A lot of members are not fully aware of the other benefits that their NHS Pension provides and will lose if they take the decision to opt out, even for a short period. Valuable benefits such as:

An Ill Health Retirement Pension - this 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.  It important that GP Locums know how their death-in-service benefits could be affected if you are technically not in service when you die. We are here to help make sure that your family is well protected and it’s important that you make  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 SPPA or your financial planner.

Also, each section of the NHS Pension Scheme has different entitlements to death-in-service, it’s important to know what these differences are, so you can make sure your family has sufficient protection.

Step 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. For example, do you 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.

The recent finding following the challenge to the firefighters pension scheme in 2015 which was deemed to be age discriminatory, will have a knock-on effect on the NHS pensions scheme, so there will be further complications regarding normal retirement ages to come! 

So even if the NHS Pension Scheme doesn’t change much, the legislation surrounding it does.  

Step 4. Make sure your service history is correct!

Your pension is based on your salary and your service history. The SPPA probably has your pensionable pay 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.

Step 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 just big dreams, you will very likely need to get some help and advice. And the sooner the better, so that you maximise all the opportunities and allowances you have available to you. We have a specialist team here to provide independent financial advice to doctors and dentists to help you navigate the steps outlined in this article. Please contact me for further information.

Johnston Carmichael Wealth Limited is authorised and regulated by the Financial Conduct Authority.

Please note: This communication should not be read as financial advice. While all possible care is taken in the completion of this  article, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained herein can be accepted by this firm. 

This blog represents our interpretation of current and proposed legislation and HMRC practice as at the date of publication. These may change in future.

Please note, pensions are long term investments and cannot usually be accessed until age 55 (age 57 from 2028). Any income from a pension over and above any tax-free allowance, will be taxed at your marginal rate. Investments within pensions can go down as well as up and you may not get back the full amount invested. Pension legislation including the tax aspects can and may change in the future.