Navigating Transfers Into The NHS Pension Scheme

by Carl Roberts

We were asked recently by a client if they could transfer an old private defined contribution pension into their NHS pension. Many people don't realise that the NHS pension scheme can in fact accept transfers in from other pensions. By transferring in old, often forgotten pensions, a person can increase their NHS pension benefits significantly.

But there is a catch!

Transfer Rules

If a person has worked for one NHS employer in England and Wales and is joining a different one, then they don't need to worry about applying for a transfer. The pension benefits will automatically carry across to their new NHS employer.

Anyone who has been through a divorce recently will not be able to transfer in credits from any pension sharing awards.

For all other pension transfers the person must:

• Be an active member of the NHS pension scheme. You can't transfer in if you have left employment with the NHS and/or are no longer a member of the NHS pension scheme.
• Make an application to transfer in a pension within 12 months of joining the NHS pension scheme and before ‘Normal Pension Age'. (This is the catch people miss).
• Receive a pension value quote from the old pension before they can apply.

If the old pension is part of the Public Sector Transfer Club then this pension can again be transferred into the NHS scheme providing the break between leaving the former scheme and joining the NHS pension scheme is no longer than 5 years.

Further information and transfer application forms can be found in the NHS Pension transfer in guide and application pack.

Out Of Time

Unfortunately our client's transfer was well outside the one year window, because the NHS had employed him for a number of years.

However, this didn't stop us from reviewing the client's old pension. We were pleased to find that we were able to reduce the pension charges significantly by transferring to an alternative private defined contribution pension.  We also ensured the investment strategy was more aligned with their objectives and risk profile.

Having a separate private defined contribution pension to sit alongside the NHS pension scheme can be very useful for the right client. Our client is happy with the flexibility he now has through his private pension including the ability to take money out earlier before NHS normal pension age. It's a nice fit alongside the guaranteed benefits of the NHS pension.

Carl Roberts is a Managing Director and Chartered Financial Planner at RTS Financial Planning.

The views expressed in this article are that of this author and do not necessarily reflect the views and opinions of Voyant.