Due to the ongoing impact of Covid-19, NHS pensions have recently announced that the voluntary Scheme Pays election deadline for 2020/21 has been extended from 31 July 2022 to 31 March 2023.
Pension benefits can grow by up to £40,000 per year before you risk incurring a Pensions Savings Annual Allowance charge. For higher earners, if threshold income (taxable income less pension contributions) is over £200,000 and adjusted income (net taxable income plus pension contributions) is over £240,000, the £40,000 allowance will be reduced down to a minimum of £4,000 – once income is £312,000 or over.
Where growth figures are not yet available for 2020/21, you may wish to consider the option to complete a provisional Scheme Pays election form with a nominal sum of £1. You will then have until 31 July 2026 to amend this as appropriate.
Ultimately, you will need to take advice from a Pension Adviser to determine whether a Scheme Pays election is the correct advice for your particular financial situation.
In the short term, there is no downside to submitting a nominal £1 election to leave your options open when you receive the final information.
If you would like assistance in completing the forms, please contact your usual BHP Healthcare contact.
