nhs pension lump sum

PoGee

Is it true that regardless of the lump sum/ pension forecasts of previous years, the amount you get depends on the amount of taxation received by the government? E.g. it could be reduced++ if labour gets in?

Dazed_and_C0nfused

Theoretically it could be, just like any legislation, but other than the cap on total PCLS/TFLS amounts there has never been a change to the scheme rules that I can recollect so it's highly unlikely.

New schemes will have their own rules so if the 2015 scheme was ever replaced then the new scheme could have different limits.  Just like 1995, 2008 and 2015 are all different.

hugheskevi

PoGee said:

Is it true that regardless of the lump sum/ pension forecasts of previous years, the amount you get depends on the amount of taxation received by the government? E.g. it could be reduced++ if labour gets in?

There is the usual caveat that Government is sovereign and so can theoretically do anything if it can command a majority in both Houses.

If a country is bankrupt, something has to happen, and some developed overseas countries have cut pension entitlement, eg, in the aftermath of the 2008 financial crisis.

But in anything like normal times, accrued pension is a property right and cannot be changed.

However, there is no entitlement to pension yet to be accrued. Many incorrectly believe they sign up to a job with a particular pension and that pension cannot be changed. This is not correct in the vast majority of circumstances (it depends on contract terms, but most contracts will give a right to be a member of a scheme, not particular features).

Labour are extremely unlikely to want to reduce NHS pensions, they are more likely to do the opposite given their backers.

dunstonh

Is it true that regardless of the lump sum/ pension forecasts of previous years, the amount you get depends on the amount of taxation received by the government? E.g. it could be reduced++ if labour gets in?

Potentially but it's not as easy as that.   As we have seen with the increase in the minimum age of 55 to 57 where some schemes are able to maintain age 55 despite the Government increasing it.

There is historical precedent.  In 2006, the Government changed the tax free cash rules into the pension commencement lump sum rules and applied it to all money purchase plans.   So, AVCs and Appropriate Personal Pensions that never had any tax free cash could now get a pension commencement lump sum.    S226 Retirement annuity contracts which paid tax free cash of three times the annual annuity were changed to 25%. 

So, things can change.  However, there is nothing to believe that Labour will reduce the maximum tax free cash entitlement from its current level.   Their current proposals are to reinstate the lifetime allowance but maintain the current (and previous) maximum tax free cash entitlement.    

Plus, Labour have also said they will not create a carve out for public sector workers but they will do it in a way that retains public sector leaders.   So, if you are a high earner in the public sector (which is £50k+ earnings to breach the LTA with enough years of service), then you may get lucky with Labour looking after you.  Whereas, if you are a lower earner in the public sector or in the private sector, you are just a pleb and not important to them.

PoGee

It would have been helpful if we received our 2023 predictions in 2023 but they said we'd get 2 in October 2024 instead, which is roughly when the election will be. Someone had said that if labour gets in, they don't bring in as much taxation as the Tories do, so would affect our pensions. 

hugheskevi

PoGee said:

It would have been helpful if we received our 2023 predictions in 2023 but they said we'd get 2 in October 2024 instead, which is roughly when the election will be. Someone had said that if labour gets in, they don't bring in as much taxation as the Tories do, so would affect our pensions. 

Labour now seen as the party of low taxation. How times change.

Pensions are not linked to taxation.