How to calculate 2023/24 AA for NHS 1995 and 2015 pension scheme

TaxAware

Hello there, 

I am new to this forum and wondered if someone could help with my query. I am a member of the NHS pension scheme and am eligible for the McCloud remedy. I tried to calculate my AA for 2023/24 as I am considering investing into a SIPP. I will request an AA statement from the pension provider and am aware there is an online calculator, but would like to be able to make the calculations myself.   

1995 scheme 

Pensionable service at 17 years

CPI at 10.1%

Salary 6/4/23 at 106009

Salary 5/4/24 at 107409 

Opening value:

1.     106009 x 17/80 = 22527              Lump sum 22527 x 3 = 67581

2.     22527 x 16 = 360432

3.     360432 + 67581 = 428013

4.     428013 + 10.1% = 471242

Closing value:

1.     107409 x 17/80 = 22824              Lump sum 22824 x 3 = 68472

2.     22824 x 16 = 365184

3.     365184 + 68472 = 433656

Pension Input Amount = 433656 – 471242 = 0

2015 scheme

Pensionable service at 6/4/24 at 2 years

Opening value:

1.     106009 x 1/54 = 1963

2.     1963 x (10.1% + 1.5%) = 228

3.     (1963 + 228) x 16 = 35056

Closing value:

1.     107409 x 2/54 = 3978

2.     3978 x 16 = 63648

Pension Input Amount = 63648 – 35056 = 28592

PIA 1995 + PIA 2015 = 0 + 28592 = 28592

Unused AA = 60000 – 28592 = 31408

hugheskevi

You need to use final pensionable earnings rather than salary. Final pensionable earnings will usually be different.

You look like you are treating the career average scheme as a final salary scheme. You should be using previously accrued amount, revaluing that, and adding new accrual.

You need to net off negative PIA from 1995 scheme against 2015 PIA.

Do you know exactly how your scheme (and payroll) treats pension accrual and earnings between 1-5th April each year, there are different approaches.

Sarahspangles

TaxAware said:

I will request an AA statement from the pension provider and am aware there is an online calculator, but would like to be able to make the calculations myself.   

I had a go myself but it got complicated. If you need to request from NHSBSA, I recommend clearly titling your email including ‘Pension Input Amount’, but not to bother providing too much information upfront, as they come back with a long list of what they require and it’s easier to complete that.

Note that their response says that they will supply the calculation for previous years as well, and you may need to use Carry Forward so this is helpful.

Edale

You may also have carry forward available from 2021/22 and 2022/23.