A consultation document has been published on proposed changes to the NHS Pension Scheme.
The most significant proposal is for the rate of employer’s contribution to increase from the current level of 14.38% to 20.68% from 1 April 2019. This would increase the cost to employers by 43.8%.
GP’s own contributions will rise similarly. For a GP on the highest contribution tier, the cost of the NHS Pension Scheme will increase from 25.25% of gross profit, to 29.15% of gross profit, an increase of 15.4%.
The consultation document states that “The Government have committed to providing additional funding to meet costs arising from the current actuarial valuation”. It remains to be seen how this will translate to the global sum increase for 2019/20.
There is also an indication that the value of pension accrual in the 2015 Scheme will increase from around 1.85% of each year’s pensionable pay, to around 2.08% of each year’s pensionable pay. This would increase the value of pensions earned from 1 April 2019 by around 12%.
For GPs earning taxable income in excess of around £90,000, this is likely to increase the annual tax liability for exceeding the Annual Allowance.
If you have any comments on the consultation, these should be submitted via: -
We will keep you informed of developments as proposals pass into legislation.
In the meantime, if you would like any further advice, please contact Andrew Goddard on 01704 215450.