Our experts answer how a practice manager’s pension will be calculated after a major change in her working arrangements  

Tracy Dell, practice Business Manager and primary care consultant in West Yorkshire:

I joined the NHS Pension scheme in 1996 and was in the 1995 section. I moved to the 2015 section, then left the practice in March 2022. I was an employed PAYE practice manager for all that time.  I then became a self-employed locum manager from April 2022 and left the NHS pension scheme.

I am 54 years old and intend to retire at 60. My questions are:

1. Am I able to convert my 2015 scheme membership (seven years) to the 1995 scheme membership under the McCloud ruling so I can take all my pension at 60 instead of having to wait until my state pension age (68)?
2. How is the best of the last three years calculation worked out?
3. What happens for the years I am not contributing to the pension scheme from 2022 until 2028 until I retire at 60?
4. Is it worth taking out a private pension from 2022 to 2028 until I retire whilst working self-employed?

Answer from tax specialist Madeleine Dowling, and GP financial adviser Greg Hendricks, both of  Wesleyan, the specialist financial services mutual for GPs:

Q1. Yes, thanks to the McCloud ruling, your 2015 membership accrued up to 31 March 2022 will automatically be move to the 1995 section. When you decide to access benefits you will then be offered a choice of which scheme, the 1995 or 2015, you receive benefits from for the period April 2015 to March 2022. NHS Pensions are expected to provide you with an annual statement illustrating your pension benefits for both options to help you decide. This should start in October 2023 for all members.

If staff are planning on retiring before October 2023, they might not get the choice until after October and will therefore retire on a provisional sum. This will then be finalised and calculated on a needs basis and whatever option is chosen will be backdated. If this is the case, it’s worth seeking advice before October 2023 because you can get estimates from NHS pension experts at companies like Wesleyan of how much you’re going to have when you retire. 

Q2. As an officer in the pension scheme, rather than a practitioner, your pension is 1/80^th of the best of the last three years’ pensionable pay (salary, wages, fees) for each year of membership in the scheme.

The pensionable pay at retirement is the best of the last three years working back in three 365 day periods from the date you access benefits or defer. For example, if the pension was taken in February 2023, the periods would be February 2020 to 2021, February 2021 to 2022 and February 2022 to 2023.

If you worked part time for any of this, the pensionable pay will be converted into its whole time equivalent to calculate the pension.

Q3. For the years you are not employed and therefore not contributing to the pension scheme (2022-2028), inflation increase will be added to your pension pot.

Your best of the last three years will already have been calculated as your final three years working as an employee and then every April, CPI will be added to it.

Q4. The NHS pension cannot be replicated in a private scheme so it’s good to be aware that the benefits will not be the same. But, yes, it is worth taking out a private pension in those remaining years before retirement as there will be tax benefits to doing so and you can top up missing years from your NHS pension.

It’s worth doing a calculation to estimate how much you will get from your NHS pension to see if you’re able to live on the amount you will receive, or to calculate how much you’d like to save between now and retirement.

Always obtain independent financial advice as personal circumstances need to be considered for all decisions.