Setting up sipp pension with NHS pension

pinkmoney

I was wondering if someone might be able to advice me- I am on NHS band 7 and have a NHS pension but only have a few years in the NHS pension as previously was with a different employer. I was thinking about setting up a SIPP and am aware you can contribute up to £60,000 and can they potentially retire from 55- however I am unsure how to work out how much my current NHS contributions are so am unsure how much I could contribute into a SIPP? Would anyone have any idea how I could work this out? Thanks for your help

Marcon

https://www.nhsbsa.nhs.uk/member-hub/annual-allowance

Nebulous2

It isn't your pension contributions that matter, it is your PIA or pension increase amount. Unfortunately you won't get it until after the end of the financial year, when it is too late to contribute. 

There are more knowledgeable people than me who will help work it out for you, but unless you have had a promotion or a big payrise during the year you should be able to contribute most of your pay to a pension if you can afford to. 

Moonwolf

The calculation is the change in value of your pension minus inflation, x 16.

This is a bit of a pain as officially you don’t know your final pensionable amount until the end of the year. However unless you have odd shifts you should have a pretty good idea of what it will be this year.

So, assuming you are only in the 2015 scheme.

If you are top of band 7 you might have pensionable earnings of £54,710 this year so would add £1,013 to your pension.

As you are in employment your accrued pension increases by 1.5% over inflation so you also need to add 1.5% of the total of your pension earned to date which I’m guessing comes to £100 or so.  So this year would you would probably have used between £17,000 and £18,000 of your annual allowance.

If you have 1995 pension as well you need to work out the increase in value caused by any payrise  and take off inflation so only a problem if you have above inflation payrises.

In future years, if you are paying into your SIPP to the penny, make sure you wait for the payrise to be announced before doing the calculation. 

Albermarle

Separately from the annual allowance, you can not get tax relief on the SIPP contributions over and above what you earn.
As an example.
If you earned £40K and paid £2,000 towards your NHS pension, you can add £38K gross ( including basic rate tax relief) . So you could add £30,400 and the SIPP provider would add £7,600 tax relief.

So you need to look at both issues, before deciding how much to add. 

hugheskevi

I am on NHS band 7

So presumably you have pensionable earnings between £47,810 and £54,710.

You probably pay contributions of 9.8% or 10.7% of salary, resulting a taxable income of £43,125 to £48,856. Unless you have other income (including bonuses) that is the maximum gross amount you can contribute to a SIPP and still get tax relief.

Perhaps worth noting that you don't appear to be a higher rate taxpayer, at least not from salary alone, so there isn't a big incentive to put money into a SIPP.

but only have a few years in the NHS pension as previously was with a different employer

If you only have service after 1 April 2022 then you will only have career average pension, no legacy final salary to be concerned about.

I am unsure how to work out how much my current NHS contributions are so am unsure how much I could contribute into a SIPP?

You need to take the amount of pension from past years, and add your current year accrual to it. There is a bit more to it than that, but your accrual in current year should be a maximum of £54,710 x 1/54 =£1,013. Add to that revaluation of CPI+1.5% and that is £1,013 x 5.3%=£1,067. That is a pension input of £1,067 x 16 = £17,070.

There will be a bit more resulting from revaluation of past accrual, but the input should be less than £20,000 as a ballpark figure.

So unless you are planning to contribute almost to the maximum possible you would be fine - and even if you were, carry-forward from past years should be available. So Annual Allowance does not appear to be a significant concern.

GrubbyGirl_2

Have you read this?

https://www.nhsbsa.nhs.uk/sites/default/files/2025-03/Added benefits-Additional pension factsheet-20250401-(V14A).pdf

Andy_L

Have you considered either:

buying additional pension in the NHS scheme 
https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension

or using  its Additional Voluntary Contribution scheme
https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/money-purchase-additional-voluntary-contributions-mpavc

rather than opening a SIPP?

Nurse2047

Have you logged onto https://mynhspension.nhsbsa.nhs.uk/
you can see what your estimated yearly income would be dependent on if 1995/2015 pension etc and dates can retire. 

2015 is 54th of taxable income so if you earn £54000 you earn £1000 into your nhs annual pension. 

I then used a compound interest calculator to work out if I paid into a sipp how much I would need to pay in if wish to retire at 60 or 65 etc until my nhs and state pension kick in. 

I found the additional pension system awful and they messed up my payments etc 
NHS AVC could be a good option also