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.

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