The additional pension calculator
Members who are contributing to the NHS Pension Scheme can pay increased contributions to buy additional pension (AP) that will provide a maximum of £5000 extra pension a year when they are retired. The minimum amount that can be bought is £250.
- The cost will vary depending on a number of factors including:
- How much AP is bought and whether it is paid for in instalments or by a lump sum.
- Whether it will increase the member’s pension only or both the member’s pension and any dependant’s pension that becomes payable after the member dies.
Members may choose to pay either in instalments or by a lump sum payment. Employers can also buy AP on a member’s behalf but can only do so by a lump sum payment.
For payment in instalments members must choose a payment period of between 1 and 20 whole years, which must end before reaching the age when the AP is due to be paid. Spreading instalments over a longer period costs more. The amount of the instalment is set at the outset. Employers must deduct the same amount of money every month unless instructed by NHS Pensions that it has changed.
For purchase by lump sum the full payment must be received within 1 month of the application being accepted by NHS Pensions. An invoice will be sent to the employer confirming the amount due. If payment is made within 1 month the purchase is complete but if it is not received the application for AP will be cancelled.
The calculator is for members who are considering buying AP. It allows them to see how much different AP increases will cost. Before buying AP members and employers must read the more detailed information in the Increasing your benefits factsheet and Additional Pension FAQs. They can be found by clicking on the following link http://www.nhsbsa.nhs.uk/Pensions/4191.aspx
- Important Change - Following a review by the scheme actuary the cost of buying AP has changed
- All new quotations / purchases - The calculator has been updated and already includes the new costs.
- Currently incomplete purchases - We will write to members about the new costs, which apply to instalments payable on or after 1 April 2013. Members affected by an increase can either, pay future instalments at the new rate to complete the purchase, or end the agreement and receive credit for instalments already paid. Reduced rates will be applied automatically. Already completed agreements and those due for completion before 1 April 2013 are not affected by the review.