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Increasing your pension

You may be able to increase your NHS pension in different ways.

Additional Pension

Additional Pension is a flexible way of increasing your NHS Pension.

You can choose to buy a set amount of annual pension, which you can pay for either with a lump sum payment or by regular contributions deducted from your pay, for an agreed period of time.

Additional Pension can be bought at any time during the year as either:

  • personal cover which increases your own pension benefits only; or
  • dependants cover, which increases your own pension and the benefits that will be payable to your spouse, partner or dependant children after your death.

Additional Pension does not include an automatic lump sum but you can include your Additional Pension in the total pension that is exchanged for lump sum.

 

Irrespective of your working pattern you will get the same amount of Additional Pension at retirement and the cost of purchasing Additional Pension is the same whether you work full time or part time.

Before you apply

Read the Additional Pension factsheet for more information.

How to apply

The calculator will provide you with a partly completed application form on which you should complete the remaining personal details and then pass the form to your employer or Pension Officer.

Additional Pension (AP) calculator

Election to purchase Additional Pension (AP1) form (only complete this form if you do not have access to the calculator)

 

Early Retirement Reduction Buy Out (ERRBO)

This option is for members of the 2015 Scheme only.  You have the facility to buy out the reduction that would apply if you claimed your pension before your normal pension age which in the 2015 Scheme is the same as your State Pension Age, or age 65 if that is later, and may rise during membership of the Scheme if State Pension Age rises.

Before you apply

Read the Early Retirement Reduction Buy Out factsheet for more information.

How to apply

Complete the Early Retirement Reduction Buy Out Expression of interest (ERRBO1) form to register your interest.

 

If your application is successful we will let you know. You must then complete the Early Retirement Reduction Buy Out Application for agreement (ERRBO3) form and return it to us.

 

Money Purchase Additional Voluntary Contributions (MPAVC)

A Money Purchase Additional Voluntary Contributions (MPAVC) arrangement allows you to make additional contributions to build a separate retirement fund. These contributions are invested and then used to supplement your main Scheme benefits at retirement or later.

You can take up to 25% of the fund value as a tax free lump sum in addition to any main scheme lump sum. The rest of your funds are usually used to buy an extra pension or you may flexibly access them. More information about flexibly accessing benefits can be found on the MPAVC providers’ websites.

You can also make separate contributions to the company you choose to increase the benefits your dependants will receive in addition to the main Scheme, if you die before you retire.

NHS scheme providers

You can take out a MPAVC with Standard Life or Prudential. These arrangements are part of the NHS MPAVC scheme, and are run by chosen providers on our behalf.

Contributions are taken from your pay and you can choose how much to pay. You can normally change or stop the amount you pay and switch between funds and NHS providers. We have negotiated special NHS terms for these arrangements, which are reviewed regularly and there are no commission charges. As the additional contributions are invested with an external provider, the NHS Pension Scheme cannot guarantee your fund or the amount of pension it will produce.

Once in payment, the NHS Pension Scheme will guarantee your payment of any pension you receive through NHS MPAVC scheme arrangements. To find out more about NHS MPAVCs contact the providers directly. Do not contact your Pension Officer. You can do this by:

  • telephoning the helpline
  • completing and sending them the Money Purchase Additional Voluntary Contributions (MPAVC) form below.

They will give you help and send you a free information pack giving full details.

The NHS MPAVC providers are:

Standard Life

Dundas House

20 Brandon Street

Edinburgh

EH3 5DP

www.standardlifepensions.com/nhs

Helpline: 0800 33 33 06

Prudential

NHS AVC Department

Prudential

Lancing

BN15 8GB

www.pru.co.uk/nhs

Helpline: 0800 678 3921

 

Stakeholder pensions

Stakeholder Pensions are an alternative way of saving for retirement but are not normally recommended as a main pension for someone who can join the NHS Pension Scheme. If you are prevented from joining the NHS Pension Scheme for some reason and receive a moderate salary your employer can offer you an NHS Stakeholder Pension.

 

If you are a member of the NHS Pension Scheme you can also use a NHS Stakeholder Pension to top up your main NHS Pension Scheme benefits. You can do this instead of, or as well as, other top up arrangements.

 

Because stakeholder contributions are invested with an external provider the NHS Pension Scheme cannot guarantee your fund or the amount of the pension it will produce.

How to apply

NHS Stakeholder Pensions are run for the NHS by providers Standard Life and Prudential. If you would like to find out more about NHS Stakeholder Pensions please contact the provider(s) below:

Standard Life Group Pension Public Sector

Standard Life House

30 Lothian Road

Edinurgh

EH1 0WT

www.standardlife.co.uk

Helpline: 0800 33 33 06

Prudential

FREEPOST RG2384

PO Box 2711

Reading

RG1 3UL

www.pru.co.uk/nhs

Helpline: 0845 070 6666

You may, if you prefer, take out a Stakeholder Pension independently of the NHS Pension Scheme.

 

Bigger lump sum purchase

This is only for people who were members of the NHS Pension Scheme before 25 March 1972 (1995 Section only).

This option applies to anyone who is or has been married, or has a civil partner or surviving nominated partner who they have nominated to receive a full adult dependant's pension.

Before you apply

Read the Bigger Lump Sum factsheet for more information.

How to apply

If you are interested in buying a bigger lump sum please speak to your employer or Pension Officer.

 

Remember contracts to buy bigger lump sums and previously refunded membership must start from a future birthday.

 

If you have more than one NHS job you need only apply to your main employer, but you will need to inform other employers of the extra percentage contributions once confirmed so that they can also collect them. You should keep future new employers aware of your extra contributions to avoid getting into arrears.

 

If you are a general medical practitioner, contact your main Clinical Commissioning Group (CCG) or Local Health Board (LHB).

 

If you are a dental practitioner, contact the Dental Services Division (DSD) at:

 

Dental Payments Department

Dental Services Division (DSD)

EASTBOURNE

East Sussex

BN20 8AD

 

If you have a personal reference number from your CCG / LHB or the DSD, it will help if you quote it. You can start paying from your next birthday provided your application has been received by then.

 

Half cost Added Years

If you are a member of the 1995 Section and previously had NHS Pension Scheme membership refunded on or before 6 April 1978 (or a later period when you were a self employed practitioner) you may be able to buy this membership back as added years at half cost.

 

The option to buy full cost added years closed to new applications on 31 March 2009.

Before you apply

Read the Half Cost Added Years factsheet for more information.

How to apply

Make a written request to NHS Pensions including the dates of the refunded membership along with any previous surnames you may have had.

 

Tax implications of increasing your pension

Contributions paid to the NHS Pension Scheme and its Money Purchase providers to increase benefits qualify for full tax relief but cannot exceed 100% of your taxable pay.

 

Since 6 April 2006 HM Revenue and Customs (HMRC) has set an individual Lifetime Allowance (LTA) limit on tax free pension savings in all registered pension schemes. The limit mainly affects high earners and for most people it results in more tax relief being available for savings to increase their retirement benefits. The LTA applies to all your pension savings including those through additional contributions.

 

HMRC will not allow you to withdraw a tax free lump sum and receive further tax relief by reinvesting the money back into a registered pension scheme. This is known as ‘recycling lump sums’ and could apply if the money is reinvested as a lump sum or in monthly payments. It is possible that you could be affected by this rule if you retire within two years of making an election to buy additional benefits. If you think you could be affected discuss your plans with a professional financial adviser before proceeding.

 

The Annual Allowance is currently £40,000. However this can reduce to £30,000 if you access the new pension flexibilities on or after 6 April 2015 and contribute £10,000 or more to a defined contribution scheme; this includes the NHS Money Purchase AVC Scheme. The Annual Allowance is the maximum amount of tax free growth that your pension savings can grow by, excluding any State Pension, in a tax year. Growth in the NHS Pension Scheme includes any added pension or added years purchased or being purchased during that tax year. If the growth in the NHS Pension Scheme (and any other pension arrangement, including contributions to Money Purchase benefits) exceeds the Annual Allowance you may incur an Annual Allowance charge.