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T5 - SUPERANNUATION & PERSONAL PENSIONS
Who is the Superannuation scheme run by? It is the benefits scheme run by the NHS for its employees.
Are people who work in the medical profession eligible? Yes. What benefits do the scheme provide? A pension and tax-free lump sum when you retire Life assurance cover Ill health retirement benefits Redundancy benefits Family benefits I am in the medical profession. Do I have to become a member? No. It is not compulsory, but can provide excellent value. Can I still pay personal pension premiums? There are set limits of pension and superannuation contributions that you must not exceed. By paying into the superannuation Scheme you are using up some or all of your annual limit. I have heard that it is possible to "buy back added years" as a method for increasing your NHS pension. Is this the case? Yes. If you joined the Superannuation scheme late or you expect to retire early you can buy added years. The extra years of membership you buy must not take your total scheme membership above 40 years. Another way to increase your NHS pension may be to make additional voluntary contributions. (AVCs). Paying AVCs will increase your pension but not your tax-free lump sum. The NHS AVC scheme is run by Equitable Life. Can I pay into a personal pension? Yes, under certain circumstances. Normally you can pay personal pension premiums if: If you are not in the NHS Superannuation scheme and/or You have income from private patients. The rules governing the amount you can pay are quite complex and are based on your Net Relevant Earnings. The Inland Revenue also set a cap on net relevant earnings. The current earnings cap is 102,000 (£99,000 in 2003/04) therefore the maximum contribution that can be made in one year is £40,800 (102,000 x 40%). (Please note, 40% apples only if you are age 61-74) It is advisable to seek independent advice before starting a personal pension scheme. |
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