Is this a crystal ball for your NHS Pension?

Whilst the Budget 2016 didn’t rock the pensions’ world with any new announcements, there are already enough significant changes coming into effect on the 6th April 2016 that will affect the pensions of virtually all NHS Pension Scheme members.

They are changes which bring a host of questions that need to be confidently answered:

• Am I likely to breach the Lifetime Allowance and, if so, when?
• What will my tax penalty be if I do breach the Lifetime Allowance?
• Is the NHS Pension Scheme still good value for money?
• Should I become a deferred member of the Scheme?
• Should I consider drawing my pension early?

These are not easy questions to answer but, with the help of your L&M financial adviser, you can get a more informed view of how your pension and tax may pan out for you, from now until retirement.

We will factor in, amongst other things:

• Any anticipated increases in your income
• Your private practice income (if you have or plan to have any)
• The anticipated growth in your NHS Pension and any private pension provision, year by year
• Any new annual allowance reductions and resulting indicative tax liabilities*

We will then enhance the figures to build in threshold increases in your income, any CEA awards and their timings.

With all this information combined and appropriately calculated, you will have as clear a picture as possible of your projected pension and any associated tax liability. You’ll then be better informed to make the difficult pension decisions most doctors and dentists now face.

All we need as a starting point is your Total Reward Statement from the NHS, followed up with a review with one of our advisers. We will then do the calculations you need and explain what they mean.

There is a charge for this service because of the complexity and time it takes to calculate the figures, but those who have already taken advantage of it, have found it invaluable when making key decisions.

Is this the crystal ball for your NHS Pension that you’ve been waiting for? Not quite, but it’s pretty close!

It may be impossible to avoid paying additional tax, but wouldn’t it be good to try and minimize the shock of an unexpected tax bill and/or get a better, more realistic understanding of when you can financially afford to retire? Speak to one of our specialist NHS financial advisers to see what lies ahead for you.

Do you think that having a clearer projection of your NHS Pension and associated tax liability over the years will help you better plan for the future? Let us know by adding a comment below.

* Figures are indicative and assumptions are made for future earnings and inflation factors