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  • FIRST POST
    • s_etty
    • By s_etty 29th Nov 17, 6:02 PM
    • 3Posts
    • 2Thanks
    s_etty
    NHS Pension and MPAA
    • #1
    • 29th Nov 17, 6:02 PM
    NHS Pension and MPAA 29th Nov 17 at 6:02 PM
    Hi,
    I am running rings around myself so I thought I would ask on here so I can hopefully get some clarity.

    I am currently in the 1995 section of the NHS pension and still contributing. I have also recently discovered a private pension pot of £19k that I had forgotten about (how I did this is beyond me!).

    I would like to drawdown this pot in two lumps ( I understand the tax situation regarding emergency coding and claiming the overpaid tax back) in different tax years to avoid going into the higher tax band . I would like to buy additional NHS pension with this money. The NHS pension is a final salary scheme but I am able to buy additional pension.

    I am utterly confused, no sorry clueless, around where the Money Purchase Annual Allowance fits into this. I THINK that if I drawdown the private pension I will be liable for tax on my NHS contributions above £4K,including the amount that the employer contributes-is this correct?

    Can someone please explain in English how this MPAA thingy will fetch my plans?

    Many thanks

    Simon
Page 1
    • Mnd
    • By Mnd 29th Nov 17, 8:36 PM
    • 255 Posts
    • 288 Thanks
    Mnd
    • #2
    • 29th Nov 17, 8:36 PM
    • #2
    • 29th Nov 17, 8:36 PM
    As I understand it, you can take the 25% taxfree lump sum and as long as you don't take any taxable money then you don't come under the MPAA rules
    As long as you don't take over £7.5k you will also not fall foul of the recycling rules.
    However I don't claim to be an expert and if I'm wrong somebody will correct me
    • greenglide
    • By greenglide 29th Nov 17, 11:08 PM
    • 2,919 Posts
    • 1,894 Thanks
    greenglide
    • #3
    • 29th Nov 17, 11:08 PM
    • #3
    • 29th Nov 17, 11:08 PM
    The MPAA only applies to DC schemes so you can continue contributions to the NHS scheme.

    Any contributions to personal / private pensions will be subject to it.

    See here https://www.aegon.co.uk/support/faq/pension-technical/MPAA.html
    Last edited by greenglide; 29-11-2017 at 11:10 PM. Reason: add link
    • cloud_dog
    • By cloud_dog 29th Nov 17, 11:58 PM
    • 3,308 Posts
    • 1,864 Thanks
    cloud_dog
    • #4
    • 29th Nov 17, 11:58 PM
    • #4
    • 29th Nov 17, 11:58 PM
    OP, are you sure you want to put all your eggs in your NHS pension basket?

    Is it possible you may want to retire early, or before you are able to access the NHS pension? This PP might prove very useful in allowing some flexibility.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • woolly_wombat
    • By woolly_wombat 30th Nov 17, 10:36 AM
    • 502 Posts
    • 304 Thanks
    woolly_wombat
    • #5
    • 30th Nov 17, 10:36 AM
    • #5
    • 30th Nov 17, 10:36 AM
    OP, are you sure you want to put all your eggs in your NHS pension basket?

    Is it possible you may want to retire early, or before you are able to access the NHS pension? This PP might prove very useful in allowing some flexibility.
    Originally posted by cloud_dog
    Fair point, but the OP is a member of the 1995 section of the NHS pension and therefore has a normal retirement age of 60.
    • cloud_dog
    • By cloud_dog 30th Nov 17, 12:38 PM
    • 3,308 Posts
    • 1,864 Thanks
    cloud_dog
    • #6
    • 30th Nov 17, 12:38 PM
    • #6
    • 30th Nov 17, 12:38 PM
    Fair point, but the OP is a member of the 1995 section of the NHS pension and therefore has a normal retirement age of 60.
    Originally posted by woolly_wombat
    Ok, fair comment but, the question still stands.

    If they are planning / happy to work to 60 and if any transferred in monies can buy additional years, and in what NHS scheme, what is the implication of this?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • s_etty
    • By s_etty 30th Nov 17, 5:45 PM
    • 3 Posts
    • 2 Thanks
    s_etty
    • #7
    • 30th Nov 17, 5:45 PM
    • #7
    • 30th Nov 17, 5:45 PM
    I am intent on early retirement in a couple of years. I want to use the drawdown money to buy added pension-you buy it in lots of £250, £500 etc. I have enquired at NHS pensions but they are yet to respond in a form of intelligible language. It is very frustrating. It looks like Iíll have to see an IFA as HMRC were useless as well. The lady on the end of the phone at HMRC had to ask a colleague what the tax bands were. Hopeless.
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