An NHS Pension Scheme Annual Allowance and tax 'ready reckoner' has been released for use by scheme members

01.12.2020
Alex Harrington
Healthcare

A new tool has been developed to enable members of the NHS pension scheme to have an insight into their overall position.

Following the demand from Healthcare professionals to project their future pension growth, and concern over the respective tax implications of Annual Allowance charges, First Actuarial (in conjunction with NHS employers) have developed a tool to enable members to have an insight into their overall position. 

The tool can be found here.

It has been designed to help provide an understanding and to prompt members to seek guidance and advice where appropriate. The tool will offer benefits to users as follows:

  • A traffic light system indicating the likelihood of exposure to Annual Allowance charges.
  • A projection of pension benefit growth for the year ahead.
  • Applicability of Tapered Annual Allowance.

The traffic light system will give members an idea of whether they are well under, reasonably close to exceeding, or breaching their respective Annual Allowance for the 2020/21 tax year. 

Due to the complexities of Annual Allowance and tapering rules, the tool only provides an indication of the members risk level, as opposed to their actual position.

At present the tool only provides an insight into members’ positions for the 2020/21 tax year, and utilises tax rates for England and Wales.

Although the tapering rules were reformed following the 2020 budget, and less healthcare professionals are expected to be affected (with those who are affected, likely to incur less substantial charges due to the retention of Annual Allowances), importance should still be given to ascertaining your respective position. 

Whilst useful for providing a simplified indication of your position, the Ready Reckoner is not a substitute for professional advice, and Lovewell Blake and Lovewell Blake Financial Planning Limited can provide assistance for those who are likely affected. 

Further guidance on how to use the ready reckoner can be found here.

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