Put simply, pensions are a pot of money saved over your working life that you can access when you leave the workforce to use as you wish to enjoy a different pace of life after work. You work, save, retire, enjoy.
But it’s not as simple as that in reality. There are lots of different, some unique, scenarios that complicate the process. We want to help ensure you get the most out of your NHS Pension at every turn so you can enjoy the retirement you deserve after dedicating your work to helping others.
Let’s take a look at some of the scenarios that may throw a spanner in the works of your retirement plan and how you can plan your financial future around them.
Your NHS Pension: Taking a break in service
Taking a break in service from the NHS can impact your NHS Pension, depending on what scheme you’re a member of and how long you take a break for.
You may be considering taking a break in service from your role in the NHS, perhaps you have a lifetime dream of travelling, would like to spend some extended time with loved ones, or maybe you would just like a break.
As soon as you leave the scheme, your 2015 pension benefits will increase by CPI instead of increasing with CPI plus 1.5%. The same applies to a GP with benefits in the 1995/2008 scheme. A hospital doctor will have an officer’s pension in the 1995/2008 scheme and this is based on their final salary. This will be the salary as of the date of leaving the scheme, and again this will increase by CPI and will, therefore, lose the final salary linking.
When you rejoin the 2015 scheme, as long as your break is five years or less, you’ll start to accrue benefits again, increasing by inflation plus 1.5%.
Discover more in-depth details about your NHS Pension with a break in service here.
Your NHS Pension: Moving abroad
Are you considering relocating overseas? It’s important to understand the implications of a move on your NHS Pension.
Higher salaries and more attractive salaries are tempting doctors to move abroad, with four in 10 junior doctors in the UK intending to leave the NHS as soon as they find a new role overseas.
There are many considerations to make when thinking about moving abroad, and financial ramifications are one of them. It’s not only the upfront costs of a move you have to think about but also the impact on your pension. Once you leave the NHS, you will no longer be an active member of the NHS Pension Scheme. But you will still need to think about the benefits you have built up so far. Your options will partly depend on how long you’ve been a member of the scheme and what you do in the future.
Find out more about how moving abroad impacts your NHS Pension here.
Your NHS Pension: Getting divorced
Sometimes things happen in life that you don’t plan for. Navigating the landscape of separation, dissolution or divorce can be complex, legally and emotionally.
Many things can happen involving your NHS Pension during a divorce: earmarking orders, Pension Sharing, requests for information, Cash Equivalent Transfer Value and more. All of these can be concerning if you’re not prepared, which is why we’ve put together a glossary to help you navigate the legal jargon.
The value of an NHS Pension member’s benefits is reduced by the percentage allocated to the former spouse in the divorce settlement at the effective date of the order, which is known as the Pension Debit. If a member remarries, the pension share will reduce any surviving partner benefits payable, but allowances for dependent children are unaffected.
Make sure you know exactly what happens to your NHS Pension in the event of divorce here.
Protecting your NHS Pension
Some events are unavoidable, but arming yourself with knowledge about your NHS Pension can help you make the most of your benefits and savings. Get in touch with a Chase de Vere independent financial adviser today.
NHS Pensions vary in complexity and can be confusing at the best of times, never more so than during a divorce when the details need to be addressed carefully.
An independent financial adviser will discuss all the options available to meet your individual needs.
Tax advice is not regulated by the Financial Conduct Authority.
Content correct at time of writing and is intended for general information only and should not be construed as advice.