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NHS Pension Basics

As a healthcare professional, you are eligible to join the NHS Pension Scheme, the largest centrally administered public service pension scheme in Europe. The NHS Pension Scheme provides a very valuable indexed retirement income which is based on a combination of the number of years worked and salary.

The NHS Pension Scheme is almost definitely the largest financial commitment that a health professional will have in their career and it forms the backbone of your retirement plans.

Any financial planning you undertake should take into consideration the benefits you already pay for through your membership of the scheme.

Our advisers are specialists with a full understanding of the NHS Pension Schemes and ensure that your NHS benefits are at the core of any decisions you make.

Benefits (+) Click to open

Anyone who starts working for the NHS automatically becomes a member of the NHS Pension Scheme, but membership is voluntary and you can opt not to join and leave the Scheme at any time by completing form SD502. This form is available from your employer.

The NHS Pension Scheme has undergone significant changes that became effective on 1 April 2015. Members should read the new SD Guide

http://www.nhsbsa.nhs.uk/Documents/Pensions/SD_Guide_(V0.2)_Published_02.2015.pdf

Further information about various aspects of the NHS Pension Scheme can be found on the NHSBA website.

Members are entitled to:

 

  • defined benefit scheme which pays a pension based on the average of a member's pensionable earnings throughout their whole career
  • revaluation of active members benefits in line with the Consumer Price Index plus 1.5 per cent per annum
  • Normal Pension Age (NPA) at which benefits can be claimed, without reduction for early payment, will be linked to the same age as a member is entitled to claim their state pension
  • no limit on the number of years pension you can build up
  • final pension calculated by adding together all of the revalued pension earned in each year of membership.
  • Immediate life assurance of twice your annual pay from the first day of joining. This is usually a tax-free lump sum payable to anyone or your estate;
  • Pensions and allowances for your spouse, civil partner, qualifying unmarried partner*, and dependent children if you die;

Benefits payable

 

The following tables show the benefits that are payable from the 2015 Scheme.

 

Benefit

Death in pensionable service

Death of a pensioner member*

Death with deferred pension

Death of a recent leaver**

Lump sum

The higher of:

2 x the relevant earnings;

or

2 x the revalued pensionable earnings for the Scheme year with the highest revalued pensionable earnings

The lesser of:

5 x pension less pension already paid;

or

2 x the lump sum payable had they been an active member on the date of death less any retirement lump sum taken

2.025 x the annual pension the member would have received had they retired on the date of death assuming they did not take a lump sum

2.025 x the annual pension the member would have received had they retired on the date of death assuming they did not take a lump sum

Adult

survivor

pension

(Must have at least 2 years’ membership unless stated otherwise)

Either:

33.75% of notional Age pension or 33.75% of notional tier 2 Ill Health pension

Short term pension equal to the rate of pensionable earnings*** for 6 months

33.75% of the pension in payment

Short term pension equal to the rate of pension paid for the first 3 months or 6 months if there is at least 1 dependant child

33.75% of notional age pension where the member died within 12 months of leaving

Death 12 months or more after leaving either:

33.75% of notional Age pension or 33.75% of notional tier 2 Ill Health pension

No short term pension

Equal to the member’s GMP

unless a CEP has been paid to HMRC

No short term pension

Children’s pension ****

16.875% of notional tier 2 Ill Health pension.

33.75% shared equally if 2 or more children

Short term pension equal to the rate of pensionable earnings*** for the first 3 or 6 months

16.875% of notional tier 2 Ill Health pension.

33.75% shared equally if 2 or more children

Short term pension equal to the rate of pension paid for the first 3 or 6 months

Detail to follow shortly

16.875% of notional tier 2 Ill Health pension.

33.75% shared equally if 2 or more children

No short term pension

 

 

Source NHSBA SD Guide V0.2

How we can help (+) Click to open

Your retirement planning strategy is not just about how much money you will receive from the NHS Pension scheme but about your personal goals and family circumstances.

There is no "one size fits all solution" to retirement planning as your circumstances will be different to your friends and the colleagues you work with.

You may wish to consider part time work after 24 hour retirement or you might wish to completely retire in two years’ time or tomorrow! Whatever your plans are for retirement our experienced specialist advisers could help you to plan your retirement strategy.