Hello, I am Pranshu Khurana an International Medical Graduate from China, currently working as a Clinical Fellow in Paediatrics in London. In this blog, I will be deep-diving into the topic of NHS Pensions, whether you need it or not. Hopefully, after reading this you would be in a better position to decide whether you opt In or opt out of the scheme.
I will be discussing about the following in the blog:
1) What is the NHS Pension Scheme
2) Pensionable Pay
3) Benefits of NHS Pension
4) Tax Benefits and TRS
5) The Big Question Opt-in or Opt-out?
Saving for your Retirement is important. Don’t leave it too late to build what you need.
NHS pension is nothing but a Defined benefit scheme for which we pay a monthly membership fees and the benefit is calculated by a simple formula:
Your Annual Pension*20+ Your Lump Sum= The value of your pension scheme benefit that is the promise to pay you the salary that you would get until you die. On top of this your employer contributes the equivalent of an extra 20.6% of your pay to help meet the cost of your pension benefits.
There are currently 7 contribution tiers ranging from 5% to 14.5%. The recent contribution range is down below, have a look and check if you are paying the correct pension contribution.
Moving on to the benefits you get by opting into the NHS pension scheme:
1) No Income Tax on the pension contributions
2) Pensionable pay for life backed by the Government
3) Employer contribution of 20.6%
4) Options that let you take your pension when you want, even before you retire
5) Covered for death benefits and family entitlement and dependent children
6) Easy to track Total Rewards System (TRS)/ Annual benefits statement via ESR
7) Early ill health retirement benefits.
There are a lot of benefits to join the Pension scheme and you can save Income tax on the monthly/weekly pension contribution you pay. Everything is transparent and is easily accessible via Total Reward Systems or an Annual Benefits Statement that can be checked anytime and it gets updated annually.
So to answer the big question of whether to join the NHS pensions or not depends totally on your circumstances and your relationship with money, Clearly benefits outweigh the risks. So if you are here for a long run definitely opt in for the pension scheme otherwise you can opt-out and enjoy the extra money you get now.
Need more tips and advice
I would be happy to respond to your questions regarding NHS Pensions at trewlink.com. You can find me at https://trewlink.com?referrer=pra923842 as Ambassador and follow my profile Pranshu Khurana to get more help and guidance.