NHS Pension Changes and the Withdrawal of Transitional Protection
The NHS Pension has changed. At the very least you will have seen your contribution level change and almost certainly increase from April 2008. The essential differences between the Old and New Scheme are a shift of retirement age from 60 to 65 and an enhancement to the accrual rate from 1.4% to 1.87% but no automatic entitlement to a Tax Free Lump Sum at retirement. The ability to purchase Added Years has been removed for all, except those that expressed an interest prior to 1st April 2008 and have been replaced with the Additional Pension, the ability to purchase an income of up to £5,000 per annum.
 
At present, assuming you joined the NHS Pension Scheme prior to 1st April 2008, you are a member of the Old Scheme and at some stage in 2009 will have an option to make a “one way” shift to the New Scheme but please only do so after taking independent financial advice.

April 2009 will see the removal of Transitional Protection for those with total pension funds that could exceed the Lifetime Allowance which was originally £1.5m in 2006/07 and will rise to £1.8m by 2010/11. This use of Primary Protection, Enhanced Protection or possibly both is potentially the avoidance of a tax charge up to 55%. The deadline for registration is April 5th 2009

• So What Action is Needed
  Request an A Day Estimate from the NHS Pensions Agency and any other pension providers you have funds with.
  Request Projections based upon your Normal Retirement Age and 65.
  Seek Specialist Independent Advice.

If you would like to know more about how The Medical Insurance Advisory Bureau can help you with this, please complete our online enquiry froms and one of our associate advisers will contact you. Alternativey you can call us on 01438 730210