Your NHS Pension - Are you sleep-walking into oblivion?
We are facing a whole new level of complexities surrounding the NHS Pension Scheme and the new rules on Annual Allowances and Life Time Allowances mean that medical professionals pensions are at risk of extremely penal tax charges. The reduction in these allowances will potentially affect all clinicians and the tolerances between the right and wrong decisions which clinicians are faced with have now grown tighter than many are even aware of. The potential financial losses which would result from making the wrong decisions cannot be emphasised enough.
You have options:
a) You can bury your head in the sand and wait for your NHS statement
b) You can take a gamble on whether you receive your NHS statement in time and whether it’s actually correct (many of them aren’t…we’ve checked and informed the NHS Pension Agency numerous times!)
c) Rely on your accountant or financial adviser providing you with your Annual Allowance (AA) excess and Lifetime Allowance (LTA) figures … the LTA is a basic calculation but that’s the easy part so don’t naively think you’re sorted as there’s much more to it if you want advance warning of your tax liabilities and specialist advice regarding your options.
You can seek specialist advice from us. Despite the NHS Pensions Agency being behind the curve with the right information, our experts have developed a financial model in order to tell you;
1. What is the actual value of your benefits as at 5/4/14 as this determines your personal limit for Individual Protection 2014 (IP14). You must apply by 5/4/2017. Under IP14 you could save as much as £6,250 per annum off your pension or as much as £3,125 under Individual Protection 2016 (IP16). We can make these applications on your behalf.
2. Where are you with the Annual Allowance for 2014/15, 2015/16 and 2016/17?
3. The Annual Allowance (AA) is now £40,000 and for some doctors from 2016/17 this could be as little as £10,000 for what the Government call ‘High Earners’.
4. For some GPs, joining the 2015 scheme may not be in their best interest so wouldn’t you like to know before you have a problem?
5. Our proactive NHS Pension expertise enables our clients to make informed decisions… Should you stay or should you go now?
These new reforms introduced to the NHS Pension Scheme mean the stakes are higher than ever and the importance of specialist, independent advice is paramount. Resolving the complexities of the various options is always going to be a challenge and will involve a far greater degree of specialist work than ever before.
At BW Medical Accountants, we have the resources and technical experts in place to meet the challenge and our medical clients will receive the best possible advice and guidance. This will ensure that the tax charges are kept to the correct minimum and your pension entitlement is maximised.
Contact us for more information regarding our NHS Pension Management Service. Delivered by our specialist medical accountants and our independent financial advisers at sister company Blackett Walker Ltd.