For all NHS dentists

NHS Pension for dentists - an explanation

How the NHS pension works

9 Apr 2019
John Drysdale
A 10 minute read
by Jon Drysdale
What is the NHS pension retirement age?

Anyone joining the scheme after 31st March 2015 will have a retirement age equal to their state retirement age. This is currently age 67. If you qualified before 2015 some or all of your NHS pension might be payable at age 60 or 65. This depends on when you joined the scheme.

How much pension will I get when I retire?

This depends on your net pensionable earnings (NPE). You will get 1.85% of your (total career) NPE as a taxable annual pension when you retire. The level of your NPE will depend on how much NHS work you do and whether you are an associate or a contract provider. Every year you are required to verify your NPE via the NHS Compass system , so you should know what this is.

For example: You are an associate with £60,000 of NPE. In one year you accrue a taxable annual pension from state retirement age of £1,110 (£60,000 x 1.85%) . If you continue with this level of NPE for 30 years you will pick up a taxable annual pension from state retirement age of £60,000 x 30 x 1.85% = £33,300. So you can see the level of pension you receive depends on how much NHS work you do and how long you work for. Remember if your NPE reduces in future years or you have a career break you pension will be less.

Why is it 'tax efficient' to pay into the NHS pension scheme?

Your pension contributions are deducted from your income before you pay tax. So in effect you avoid paying income tax on any money you pay into your pension.

I'm trading as a limited company - does this affect my NHS pension?

Yes - If you are an associate you can't make contributions to the NHS pension scheme if you trade as a limited company.

Are there limits to what I can pay in?

Yes - you are limited to gross contributions of £40,000 pa and a lifetime pension value of £1,055,000. The rules are complicated here and anyone earning in excess of £110,000 should seek specialist advice on the limits. If you have personal pension this also needs to be considered.

Are there additional NHS Pension scheme benefits?

Yes - you get 'Death in Service' benefits which include a lump sum and a partners/widows/widowers/dependents pensions. If you are unable to work (permanently ) due to ill-health you may be able to claim your pension before the normal retirement age.