What was your NHS Pension Choice 2 decision?
Are you one of the many UK doctors and dentists who have or in the final stages of making your NHS Pension Choice 2 decision?
The forthcoming changes to the NHS Pension scheme for 2015 are encouraging NHS employees to consider their retirement plans on a broader scale.
The main difference for the 2015 scheme compared to the 1995 or 2008 schemes is that the retirement age, and therefore the age at which the pension benefits will become available, will now be directly linked to the state retirement age. As we are all aware, this age bracket for this is ever increasing, it’s 65 now but it could easily be 67 or higher in the not too distant future.
Broadly speaking, the decision whether to change from the 1995 to the 2008 scheme, if the option was available to you, depends on the age in which you want to retire. Pension benefits become available:
- 1995 – Age 60
- 2008 – Age 65
- 2015 – Linked to state retirement age
The 1995 scheme obviously means benefits are available to draw down earlier. However, the funds in the 2008 pension scheme accrue at a faster rate, so the decision for some has been a tricky one.
Statistics by the NHS have suggested that moving to the 2008 scheme is of little point if your plans are to retire at aged 62 or earlier.
Private pension planning for retirement
In light of the changes, many dentists and doctors are considering their options. Paying into a private pension is part of the retirement plan for most established doctors and dentists with excess income.
And, why not? Pensions are a tax efficient way to save for retirement.
Especially in light of the Pension Reform from April 2015 allowing greater flexibility in when and how pension funds are drawn.
Figurit help many doctors and dentists with pension planning and advice. We work with specialist financial advisers so between us we can advise from a financial and tax perspective. Call today to discuss your pension plan.
020 7376 9333
– PENSIONS: HMRC guidance available on new pensions
– TAX: Pensions and Savings following the Autumn Statement
– Pensions – autumn update