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.
This material is for informational purposes only and should not be relied upon as professional advice.
