NHS PENSIONS

FHMS

Hi,
I receive both state and NHS pensions. As the NHS pension is classed as ‘contracted out’ my state pension is reduced and I currently receive £8160 per annum. This amount is then deducted from my tax allowance  so that my allowance for 2024/25 is now only £2980 per annum. In effect I am taxed on my state pension. When I relate this to my friends they are amazed. I think that most people have been subjected to the golden NHS pension myth and thought it would be useful remove the gaslighting from the subject.

comeandgo

Where have you and your friends been hiding?  It has long been reported in newspapers, radio programmes, on line ,even on these pages that the state pension is taxable income, always has been.

House_owner

The golden NHS pension is not a myth, most people working in the private sector can only dream about having such a good pension.

Albermarle

The fact you have a NHS pension, and the fact that the state pension is taxable, are two totally different unrelated points.

If you have any kind of non state pension, or other taxable income, then the tax code for it is reduced by the amount of state pension you get.

Apart from that the NHS pension is a great benefit, and much better than the large majority of private sector workers get.

Ref44

Public sector pensions including the NHS scheme are gold standard by virtue of the employer/tax payer contribution that gives the pensioner far greater returns on their contributions than in the private sector

JoeCrystal

Haha. Golden myth? It is no myth but it is certainly golds for employees who literally paid peanuts for them. You after all also paid less NI contributions than someone who is not on the DB pension schemes as well in your working life. So you are extraordinary fortunate in this case and understand how the state pension is paid as gross and therefore it is perfectly standard to collect taxes from other source of income.

molerat

Shock horror. Call the tabloids.  Tomorrow's headline - "NHS pensioner taxed on their taxable income".

(From an AFPS pensioner)

dunstonh

I have said it before, and I will say it again: The NHS workforce (and pensioners) are some of the most confused people about pensions.    They understate their pension benefits, they think they are hard done by and now they don't appear to realise you pay tax on taxable income.

MX5huggy

The next shock is that some NHS widowed pensioners have to pay 40% tax on their pensions. Mum pays a little 40% on her pension from her NHS service and Dad’s teachers pension and State pension 

hyubh

FHMS said:

I receive both state and NHS pensions. As the NHS pension is classed as ‘contracted out’ my state pension is reduced and I currently receive £8160 per annum.

Conversely, you paid less NI than contracted in people and gained benefits way superior to the additional state pension forgone.

This amount is then deducted from my tax allowance  so that my allowance for 2024/25 is now only £2980 per annum. In effect I am taxed on my state pension.

That's because the state pension is indeed taxable income...

When I relate this to my friends they are amazed

A DB pension with uncapped increases and no threat of falling into the PPF is indeed amazing.

I think that most people have been subjected to the golden NHS pension myth and thought it would be useful remove the gaslighting from the subject.

No need to rub it in...

FHMS

Thanks for the comments some of which were informative and valid. I am not responsible for the bitterness some of you seem to hold towards NHS staff. Private pensions are not very good and should be improved. Lastly I worked for 38 years in acute psychiatry and earned every penny of my pension. I was not “extraordinarily fortunate” to receive a reasonable pension nor is anyone who works in the NHS.