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  • FIRST POST
    • Zarjaz
    • By Zarjaz 4th Dec 17, 8:02 PM
    • 3Posts
    • 0Thanks
    Zarjaz
    NHS and private pension
    • #1
    • 4th Dec 17, 8:02 PM
    NHS and private pension 4th Dec 17 at 8:02 PM
    I work in the NHS, and pay into the NHS pension scheme. I can retire at 60, and am aged 54. Am I allowed to also open a private pension? For example, could I pay £10,000 pa for the next 6 years into a private pension? If so, would I get tax relief (I'm a higher rate payer). Ate age 60, woudl I need to buy an annuity?

    Apologies if these questions are a bit naive!

    Gary
Page 1
    • louloubelle79
    • By louloubelle79 4th Dec 17, 8:17 PM
    • 257 Posts
    • 127 Thanks
    louloubelle79
    • #2
    • 4th Dec 17, 8:17 PM
    • #2
    • 4th Dec 17, 8:17 PM
    I can't answer it all, but as I have a NHS pension I know you can make additional payments up to approx £6000 a year and/or pay into AVC https://www.pru.co.uk/rz/nhs/
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    2017 OPs £6000
    Jan 2018 balance- £105,923
    • xylophone
    • By xylophone 4th Dec 17, 8:18 PM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    • #3
    • 4th Dec 17, 8:18 PM
    • #3
    • 4th Dec 17, 8:18 PM
    It is possible to contribute both to your occupational scheme and to a private pension scheme and receive tax relief, subject to annual and lifetime allowance

    You might consider also consider NHS AVCs.

    You would not have to buy an annuity - there are various options.

    https://www.pensionwise.gov.uk/en/explore-your-options/step-one

    https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

    https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions

    https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension
    • Dazed and confused
    • By Dazed and confused 4th Dec 17, 9:50 PM
    • 1,949 Posts
    • 876 Thanks
    Dazed and confused
    • #4
    • 4th Dec 17, 9:50 PM
    • #4
    • 4th Dec 17, 9:50 PM
    Providing you stick within the relevant contribution limits you would normally get basic rate tax relief added to your pension pot if you paid into a SIPP or personal pension.

    To use your example you would pay £10,000 which gets topped up with £2,500 basic rate tax relief so you have a pension pot of £12,500.

    Any higher rate tax relief due is claimed via HMRC and comes back to you, it doesn't get added to your pension fund but in a very simple scenario where you are earning enough to get 40% relief on the full £10,000 contribution means you would get £2,500 refund (or pay £2,500 less during the year) so your £12,500 pension fund has actually cost you £7,500.

    You actually have to be paying that much 40% tax to get it back. If you are only just into the 40% tax bracket you won't get that much back.
    • Zarjaz
    • By Zarjaz 5th Dec 17, 8:29 AM
    • 3 Posts
    • 0 Thanks
    Zarjaz
    • #5
    • 5th Dec 17, 8:29 AM
    • #5
    • 5th Dec 17, 8:29 AM
    This is very helpful. Thank you.
    • kidmugsy
    • By kidmugsy 5th Dec 17, 1:51 PM
    • 9,895 Posts
    • 6,673 Thanks
    kidmugsy
    • #6
    • 5th Dec 17, 1:51 PM
    • #6
    • 5th Dec 17, 1:51 PM
    This is very helpful. Thank you.
    Originally posted by Zarjaz
    Be sure to check versus your Annual Allowance: max £40k to cover both your own gross contribution to a SIPP or AVC, plus the annual increase in the value of your NHS pension (you should ask the pension scheme to calculate that for you).

    You can carry forward unused AA from the preceding three years.

    The permitted £40k p.a. is clawed down once you are earning more than £150k p.a.
    Free the dunston one next time too.
    • Zarjaz
    • By Zarjaz 5th Dec 17, 9:00 PM
    • 3 Posts
    • 0 Thanks
    Zarjaz
    • #7
    • 5th Dec 17, 9:00 PM
    • #7
    • 5th Dec 17, 9:00 PM
    I work in the NHS. I wish that I earned over £150k pa I suppose that chief execs, and some senior medics, will....!
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