Medics Money podcast Ep 285: Your overview of the NHS Pension.
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Aug 19, 2025 In this engaging discussion, Andy Pow, a specialist medical accountant with 30 years of experience, dives into the intricacies of the NHS pension scheme. He outlines the tax efficiencies that make these pensions appealing and breaks down the differences among the 1995, 2008, and 2015 sections. Additional benefits like death in service and ill-health retirement are explained, alongside crucial tips for maintaining accurate pension records. Listeners gain valuable insights into comparing NHS pensions with private options and the importance of regular pension checks.
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Pension Defined And Tax Trade-Off
- A pension is a tax-efficient saving vehicle that replaces income when you stop working.
- NHS pensions give tax relief on contributions but pension income is taxable when taken.
Use Tax Relief And Employer Contributions
- Do recognise NHS pension contributions reduce your taxable pay and give relief at your marginal rate.
- Factor in employer contributions because they significantly increase the value of your pension benefit.
Defined Benefit Versus Defined Contribution
- NHS pensions are defined benefit, so payouts link to service years and salary rather than investment returns.
- Private pensions are defined contribution and carry investment risk and no guaranteed outcome.