Author Topic: NHS Pension - does it stop you contributing to private pensions  (Read 507 times)

NHS Pension - does it stop you contributing to private pensions
« on: 28 February, 2024, 04:09:37 pm »
I am contributing to a private pension plan, and intend to do so for a few years.
I read that once you access pension funds you cannot continue to get tax relief on contributions.

I have a tiny amount in the NHS pension scheme, and have been invited to start drawing it at age 60.
Will this trigger the non-availability of the tax relief? I suspect it will do so.

Regulator

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Re: NHS Pension - does it stop you contributing to private pensions
« Reply #1 on: 28 February, 2024, 04:19:21 pm »
You need to get professional advice I'm afraid.  The rules around NHS pensions and their interactions with tax allowances, other pensions etc. changed last year (due to loss of consultants).  It's now very messy and complicated.
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I completely agree with Reg.

Green Party Councillor

Re: NHS Pension - does it stop you contributing to private pensions
« Reply #2 on: 28 February, 2024, 04:46:28 pm »
Thanks Regulator. That makes sense. I am starting an engagement with a (paid for) advisor.

Adam

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Re: NHS Pension - does it stop you contributing to private pensions
« Reply #3 on: 01 March, 2024, 08:11:13 pm »
I am contributing to a private pension plan, and intend to do so for a few years.
I read that once you access pension funds you cannot continue to get tax relief on contributions.

I have a tiny amount in the NHS pension scheme, and have been invited to start drawing it at age 60.
Will this trigger the non-availability of the tax relief? I suspect it will do so.

Not true.

It's only if you've taken flexible access from a money purchase scheme that you're then restricted in how much you can still pay into a personal pension, as your maximum annual allowance then is capped at £10,000.  Flexible access means you've taken out more than the 25% of the fund as a tax free cash sum.

If you access a defined benefit (final salary) scheme such as the NHS scheme, then the above is irrelevant as you can still pay in an amount equal to your income up to a maximum of the £60,000 annual allowance to your personal pension and still get full tax relief.

Be aware though there are restrictions on recycling any tax free cash taken from a final salary scheme back into a personal pension.  In simple terms, if you get some tax free cash from the NHS scheme, you can't increase your personal contributions by more than 30%, and you can't put more than 30% of the tax free cash back into a pension (if you hadn't already been paying into a pension).  Not applicable though if the NHS tax free cash is less than £7,500.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm133800
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