NHS Pensions - Annual Allowance Pension Saving Statement
FAQ
Q. What is Annual Allowance?
A. The Annual Allowance is the maximum amount of tax free growth an individual’s pension
savings can grow by in any one year. If individuals exceed this limit they will need to pay a
tax charge, the Annual Allowance charge, to HMRC.
Q. When will I receive a statement?
A. A statement will not be issued until all the necessary information has been receive e.g.
for GP’s the final calculations will not be undertaken until the update from their Local Area
Team has been received and this update will not happen until they receive the Annual
Certificate of Pensionable Profit.
Q. I also have a NHS Money Purchase AVC, will I receive a Pension Saving Statement
for this?
A. Only if your contributions to the NHS Money Purchase AVC scheme exceed the Annual
Allowance limit. If you have received a Pension Saving Statement in respect of your main
NHS Pension Scheme you will need to add any contributions made to the NHS Money
Purchase AVC scheme to your Pension Input amount to calculate the total amount of
Annual Allowance charge owing to HMRC. Alternatively if you are unsure of the
contributions you have made to the NHS Money Purchase AVC scheme you can write to
NHS Pensions requesting a Pension Saving Statement – you will need to confirm that you
want a Pension Saving Statement for the NHS Money Purchase AVC scheme.
Q. I have accessed benefits from my defined contribution scheme using HMRC’s
pension flexibilities, will this affect my Pension Saving Statement?
A. If you have notified NHS Pensions that you accessed HMRC’s pension flexibility, then
any growth in your NHS Pension benefits or your NHS Pension Scheme benefits will be
assessed against HMRC’s “alternative Annual Allowance”. If you have exceeded the
“alternative Annual Allowance” in either scheme you will be sent a Pension Saving
Statement.
Q. Can I use my Annual Allowance statement to work out my Lifetime Allowance
(LTA) position?
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A. No you cannot use your Annual Allowance statement to work out your Lifetime
Allowance. More information about the LTA can be found on the website.
Q. What are the HMRC deadlines if I elect for Scheme Pays?
A. For the tax year 2013/14 NHS Pensions must receive the Scheme Pays election notice
before 31 July 2015. More information about scheme pays can be found on the website.
Q. What if I have missed HMRC’s July deadline?
If you miss the 31 July deadline then NHS Pensions will normally not accept your Scheme
Pays Election. If you miss the deadline through no fault of your own then NHS Pensions
may exceptionally accept a Scheme Pays Election on a voluntary basis but you will have to
write to NHS Pensions giving the reason for missing the deadline.
Q. What is the Scheme Pays deadline if I retire in the year the Annual Allowance
charge occurs?
A. Your election for Scheme Pays must be received before you retire or it will not be
accepted. So as not to delay your benefits, wherever possible.
Q. What if I haven’t received a Pension Saving Statement and I am due to retire?
A. You need to estimate your likely Annual Allowance charge and complete the Scheme
Pays Election form (SPE2) and send the form to NHS Pensions before your benefits are
authorised. The amount of Scheme Pays can be amended at a later date (please see
below).
Q. What if I have already retired?
A. Once benefits have been authorised a Scheme Pays Election will not be accepted.
Q. What if I have made a Scheme pays Election and need to amend the amount?
A. HMRC allow individuals to amend their Scheme Pays Election by 31 July up to four
years after the end of the tax-year the Annual Allowance charge was due. If the amount of
Scheme Pays increases your benefits will be reduced to reflect the extra cost to the NHS
Pension Scheme.
Q. What happens when I reach age 75?
A Scheme Pays Elections must reach NHS Pensions before your 75th birthday. If they do
not then the election will not be accepted. If you haven’t received a Pension Saving
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Statement and you want to make a Scheme Pays Election you will have to make the
election on estimated amounts and amend the amount once the final figures are known.
Q. Why does my statement show zero growth?
A. A zero (£0.00 entry for growth in one of the pension input periods could mean that:


There is a negative difference between the opening value and the closing value, in
circumstances where:
 Your pensionable pay used to calculate NHS benefits for the opening value is
higher than that used to calculate NHS benefits for the closing value, or
 The growth in CPI, used in the opening value outweighs the actual growth of
your NHS benefits
You were not an active member of the NHS Pension Scheme during the pension
input period.
Q. Why is the Annual Allowance for 2010/11 shown as £50,000?
A. For tax years prior to 1 April 2011, HMRC have confirmed that a notional Annual
Allowance of £50,000 applies rather than the actual Annual Allowance limits for those tax
years.
Q. What if I have become a Practitioner in this financial year?
A. The benefits calculation for Practitioners differs from those of hospital member and
different calculations are applied. Based on these calculations, you may find that the value
of your benefits is higher at the end of the pension input period.
Q. Why is this statement different to the one I have already received in a previous
year?
A. Following feedback from our members we have made some changes to the statement.
The changes made reflect the feedback that we have received.
Q. I have received a Pension Saving Statement due to the “alternative Annual
Allowance”, why is this statement different to the one I have already received in a
previous year?
A. HMRC have prescribed that different information must be sent to members who are
affected by the “alternative Annual Allowance”.
Q. I have heard that the Annual Allowance limit changing – is this true?
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A. The Annual Allowance limit reduced to £40,000 from 6 April 2014, this will affect the NHS
Pension Schemes Pension Input Period from 1April 2014 to 31 March 2015.
Q. I have heard that pension schemes have to report members who exceed the
Annual Allowance limit – is this true?
A. Yes for the Pension Input Period beginning 1 April 2013 NHS Pensions has to inform
HMRC of every member who receives a Pension Saving Statement because they exceed
the Annual Allowance limit.
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