Request a Quote

Request a Quote

Please complete the form below, we’d love to hear from you!

The NHS pension pot: GP Pensions

  • 9th May 2016

The NHS pension pot: GP Pensions

By way of clarification, here are some pointers focused on GPs for GPs and practice managers to be aware of.

1995/2008 NHS Pension scgeme for GPs irrespective of whether we are talking about a self-employed partner or a salaried GP, both are in the same section of the pension scheme.

The pension is based upon career average earnings, which are dynamised inline with inflation plus 1.5% each year so they keep their value in real terms.  The standard pension is 1.4% of your pot and the lump sum is three times.

GPs should get a pension estimate with a complete service history and the dynamising sheet to check the earnings are correct. (We can arrange and faciliate this for you) If they are paying into added years then this is also needed.

The next step is to work out where GPs and other qualifying staff are with regards to Lifetime Allowance (LTA) and the Annual Allowance (AA).

Lifetime Allowance

This is the maximum amount of money that you can have in your fund before the Government starts applying penal tax charges.  The limit was £1.8 million and it went down further to £1 million in April 2016.

Under the 1995 scheme if the accrued pension is greater than £43,478 then it will be affected.  The effective tax charge is 55% if you break the limit.  If you were above £1.25 million as at the 6 April 2014 then you can protect yourself by applying for Individual Protection 2014 up to a maximum value of £1.5 million.

You have until 5 April 2017 to apply.  If you were below £1.25 million then, but you are currently above £1 million, then you can apply for Individual Protection 2016.

Annual Allowance (AA)

This is the amount of money you are allowed to save towards your pension each year before the government penalise you for saving too much.

As most GPs are self-employed and you don't know their earnings, then how do you know where they are.

The AA is currently £40,000 and now for some good news and not so good news. There have been changes to the way the AA has been calculated and for most GPs for the tax year 2015/16 they will not have a significant AA problem.

This all changes however for the tax year 2016/17 and for what the government deem as high earners they are going to restrict tax relief.

A high earner in this context is someone who has accessible income of more than £150,000.  If there us a threshold income of less than £100,000 they keep the £40,000 AA limit but others could see their cut to £10,000.

This is a highly complex subject and before taking any decisions, seek suitably qualified advice from specialist medical indepedent advisers fully authorsed by the Financial Conduct Authority.

The quality of advice available nationally is questionable and we would urge you to do your homework and ensure your adviser is a qualified specialist.

If you wish to discuss your NHS Pension with independent financial adviser Kevin Walker or a member of his team, call 0191 653 1022 for a free initial consultation.

Blackett Walker is authorised & regulated by the Financial Conduct Authority.

Who writes this?

Kevin Walker

Kevin Walker

NHS Pension Specialist / Independent Financial Adviser
Find out more about Kevin
  • Very smooth changeover to BW, with good communication at all times. Very efficient in the production of the accounts (as promised) and the Partners are delighted with the advice received to date.

    Paul Atkinson, Practice Manager
    Netherfield House Surgery, Northumberland
  • BW Medical Accountants have a good working knowledge of General Practice and are keenly aware of the challenges Practices face within the changing environment of the NHS.  Benfield Park have been very impressed by the way BW Medical continue to deliver the range of services they provide from Accounts to Tax and NHS Pension advice. 

    We have found Practice consultation and engagement from BW Medical specifically helpful to shape the future of the Practice.

    Jonathan McCutcheon, Practice Manager
    Benfield Park Medical Group, Newcastle
  • We had no hesitation in moving to BW Medical Accountants.  For any business your accountant is integral, and for us one of the most important factors to this relationship is to have a personal and trusting approach, which BW have undoubtedly achieved. 

    The service we receive and the interest they show in our practice assures us that they have a genuine interest in us and commitment to us.  More importantly they are always helpful and polite to answer even the dumbest of questions!  They give us confidence and reassurance knowing that they are always very up-to-date with all the numerous changes within general practice and we would have no hesitation in recommending them to other practices seeking a professional and personal accountancy service.

    Jackie Rotherham, Practice Manager
    The James Street Family Practice, Lincolnshire
  • We moved to BW Medical Accountants in 2013 and we are delighted that we have.  Having been in the same business for over 20 years it is important to have a relationship with the accountancy team but most importantly you need to have trust.  We made the decision to move our business to BW Medical Accountants and having worked with the Team especially Tina we are very satisfied.  Tina going through the accounts brought to our attention many things that I was not aware of in the past.  The first years' experience can only be described as excellent.

    Customer service is first and foremost with BW and this shines through as each and every one of them are approachable, helpful and most importantly understand and know the business.  General practice is complex and is going to get more complex in the coming years.  We need Accountants who truly understand our business. We as a practice and as individuals would certainly recommend BW Medical Accountants.

    Gloria Middleton, Managing Partner
    Westbourne Medical Group, Sunderland
  • We changed to BW Medical Accountants during this financial year and I would say we have just had the most transparent and understandable end of year meeting and the best planning advice I have ever had in 16 years of practice.

    Dr H Jervis, Partner
    Temple Sowerby Medical Practice, Cumbria

Newsletter Signup

Loading...