A little trouble understanding NHS contribution percentage

Flugelhorn

my understanding was the pension was taken off the pay and then the tax was applied so yes you effectively get 40% tax relief on it.

Think I had the ultimate "part time banding" issue - did one session every 4 weeks, earned about 4.5K a year and was paying 14.5% on it 

Korkyb

Clare43 said:

I’ve recently asked NHS pensions about contributions and other things.  They told me that contributions are actually based on the whole time equivalent pensionable pay in the previous financial year.  Maybe this helps you work it out.  They also said the contribution tier doesn’t affect how much pension you get.  

That's what I understood to be the case as well but since going part time in April that hasn't isn't what has happened in my case.


I'm a band 7 & last year was full time earning above 60k (lots of unsocial hours) so paid the 12.5% rate.

I reduced my hours by half in April this year (still as a band 7) & since then have been paying 9.5%.

I was expecting to be paying 12.5% this year so not complaining :-)

Workerdrone

Korkyb said:

Clare43 said:

I’ve recently asked NHS pensions about contributions and other things.  They told me that contributions are actually based on the whole time equivalent pensionable pay in the previous financial year.  Maybe this helps you work it out.  They also said the contribution tier doesn’t affect how much pension you get.  

That's what I understood to be the case as well but since going part time in April that hasn't isn't what has happened in my case.


I'm a band 7 & last year was full time earning above 60k (lots of unsocial hours) so paid the 12.5% rate.

I reduced my hours by half in April this year (still as a band 7) & since then have been paying 9.5%.

I was expecting to be paying 12.5% this year so not complaining :-)

It's a bit unclear how the calculation works. As my wife has paid the 12.5% for the past two months I assume its as simple as taking the £47846 full time equivalent for the current year and dividing by 12 then multiplying by the month of the year.

In her case £47846 /12 = £3987.16 * 6 = £23923. £23923 being the threshold in month 6 at which you pay the 12.5%

Without checking that would broadly figure. As at October she has earned £27862.91. I've not checked what her pay was in the month of August but I'd imagine if I looked it would be below the £23923.

As there is no link between contribution and final pension its effectively a waste of money. I have raised a query on the NHS ESR portal to check if contributing >3.2% to an NHS MPAVC will bring her back into the 9.5% threshold.

The way I see if, 3.2% in her own money purchase scheme is better than 3.2% wasted which she's going to get no benefit from

marlot

I seem to recall that taking an NHS lease car reduces the pensionable pay.

If that would be a useful benefit to you, it might be worth a look?