NHS Pension

Pinkmelpink

Hi
I am due to get my pension in August age 55. I was made redundant last August so maintain my SCS. My question is, is it worth working part time or will this affect my pension eg TAX. 
I am currently not working, as going back to nhs would affect the age i could retire.

Moonwolf

In general you will only pay additional tax on the part time earnings.

If you take your 1995 pension now you can go back later working part time.  You will accrue pension in the new 2015 scheme.

Tax on your part time pay will be at your marginal rate.  So if your pension is more than £50,000 a year you would pay 40% tax on your part time income, if your pension is less that £12,570 you might pay no tax, but unless you are earning a tiny amount you will probably pay some 20% tax, however if you have unusued personal allowance, that will go against your part time income before your tax is calculated.

Your personal allowance of £12,570 will probably initially be assigned to your pension, but you can choose where it goes and split it between your pension and part time earnings, you will pay the same tax overall but more on your pension and less on your earnings.

When you start claiming state pension your personal allowance will be applied to your state pension and tax will go up on your NHS pension.

Pinkmelpink

Hi Thanks,
I am also taking my 2015 as well as due to McCloud i only have 2022-2023 in there.
I will not be returning to NHS my yearly pension will be around £21,000 and then if i start working again around 15-20 hours a week will it be worth it with Tax eg, will i be paying what i am working back in tax?
TIA

Bigphil1474

If your pension is £21k, then usually, anything over the tax free allowance will attract 20% tax (£12.5k), so you will pay 20% tax on about £8.5k of your pension payment. Any part time wage will also attract that 20% tax, but you can earn up to £29k part time before you start paying higher rate tax. Think of it as combined income.

molerat

You will pay tax at 20% on all the second job earnings, that's all, maybe a bit of NI if you earn over £1050 in a month. You are going to be paying tax on the pension anyway. You could reduce the effective tax by paying into a pension.

MX5huggy

Pinkmelpink said:

Hi Thanks,
I am also taking my 2015 as well as due to McCloud i only have 2022-2023 in there.
I will not be returning to NHS my yearly pension will be around £21,000 and then if i start working again around 15-20 hours a week will it be worth it with Tax eg, will i be paying what i am working back in tax?
TIA

There are virtually no circumstances where working is “not worth it” and certainly at the numbers you’re talking about no if fact because the pension does not count towards the NI allowance the first £12k you earn from a job you wont pay 8% NI on but will pay 20% tax.