fbpx

Dentists Who Invest

Podcast Episode

Full Transcript

James: What is up everybody? Welcome back to the Dentist Who Invest Podcast, Guys. This is a podcast I’ve been looking forwards to for quite some time because we are here today to talk about the NHS pension, Eagle eyed or eagle eared. Listeners of the podcast know that we already have two, but they were so long ago that I wanted to revisit it, make an all in one podcast, which covers their salient points of the NHS pension.

And to assist me in achieving that today, I have sat across the table, the virtual table, because of course this is on Zoom. My good friend, financial advisor, Ian Hawke Ian, how are you today? 

Good, thanks James. 

Ian: How are you? 

James: Yeah, I’m 10 out of 10, mate. I’m looking forward to this. I’m looking forward to having an all under one roof NHS podcast because the NHS podcast, those two NHS podcasts that we have already are like by far and away runaway successes compared to the rest of the other podcast.

They’ve all done well, but those ones have done particularly well. So I’m really excited to create this today because I know it’s going to help a lot of people. 

Ian: Good, Yes. Hot topic. Always a hot topic. 

James: Huge topic. And you know what? The stuff in here will be relevant for doctors as well, so we should definitely get the message out there about that too, which I’m sure we will in due course.

Ian, you’re relatively new to the dentist Who Invest group because we met not that long ago. Maybe it might be nice to do a little bit of an intro. 

Ian: Yeah, definitely. So, so I, I’ve been giving financial advice for, God, 24 years. I don’t know like it, but yeah, about 24 years I’ve been working with dentists and medics for probably about seven years independently.

And specializing in the NHS and retirement for about, well, for my whole career actually. But mainly the seven years just go on in dentists at medic. 

James: Top stuff. Let’s jump straight in. So people who have listened to the previous NSF NHS podcast will know that it works a little differently from your traditional pension.

So instead of me taking the words out of your mouth in and us repeating ourselves, let’s go ahead, 

 I’ll let you cover that because of course you’re the man of the knowledge and you do this everyday 

Ian: Yeah, definitely. So I think if we start with a kind of refresher, because within the NHS there is one NHS pension scheme, but there’s three components that you will be in, or you could be in one or two or three of them.

So and these will depend on when you joined the nhs, but also some choices that you made along the way. So, The original pension scheme, the original NHS pension scheme is the 1995 pension scheme. This is kind of the original gold plated pension scheme that you’d be in if you joined the NHS prior to 2008.

And the way this pension scheme works is different. It depends on whether you’re a hospital dentist or whether a principal, and effectively what happens. Is that if you are a hospital dentist, then you are on a final salary pension, and each year that you work in the NHS you accrue one 80th of your pension as a, as a salary, as a pension.

If you are a principal, however it’s a bit different. You are in a career average pension scheme and you, you, each year, you work you pot pension over your lifetime that builds and you get that pension.

This pension works. You can retire at the age of 60 and when it comes to retirement, you get an income for life, which is guaranteed an index linked, and you also get a tax free lump sum of three times your. pension So that’s the 1995 pension, final salary hospital dentists retire at 60 and you get an income plus tax free lump. 2008, though, they changed the pension scheme and they introduced the 2008 pension scheme. If you were already in the 95 scheme, you were given the choice as to whether you were to move into the 2000 scheme or not. So you were given a choice. Okay. 

What I found is from experience, most people didn’t, and I’ll explain why in a moment. So the way this, this, this pension differs is the way you accrue benefits is better. So your accrue 

Benefits quicker because if you’re a hospital dentist, rather than accruing one 80th of your pensionable pay like in the 95 scheme, in the 2008 scheme, you’re accrue one 80th. So basically your accrue benefits quicker.

However, you have to work five years longer to unlock those benefits because the retirement age got pushed back to 65, so it went from 60 to 65, and this is why most people said, Actually, let’s stick with a 95. Can, 

James: Can I jump in? Sorry, there just for two seconds. Of course. I, I’m not sure if I misheard you.

Did it say, did you say that the accrual rate in the 95 scheme is one? And then also in 2008, it’s also one 80th. 

Ian: One 60th.

Ah, okay. Okay. I dunno if that was a slip of the tongue, but I think you said one 80th as well. Ah, and I was trying to compute that in my head. I just wanted to jump in to clear that up.

So the accrual rate is higher, but we have to wait longer to get the pension. Exactly, yes. Sorry. It’s one 80th 95 1 60th 2008. So they kinda give you an incentive to say, Look, you’ll get benefits quicker, but you have to wait five years longer to unlock. Also with the 2008 scheme, there’s no automatic lump sum at retirement.

So rather than getting a lump sum, sorry, rather than getting an income plus a lump sum in the 95 scheme, in the 2008 scheme, you just get an income. There is no tax free lump sum, which is also interesting. And again, that’s another reason why people thought actually, But this, this, you were given the choice whether you moved into the scheme, by the way.

If you joined the NHS after 2008, you automatically joined the 2008 scheme. Okay? You missed the 95. Thirdly in 2015, they changed the pension scheme again and they introduced a 2015 scheme. And the way this one worked was, again, very similar that they, again, they moved away from these final salary pension schemes and they moved towards more career average for hospital, hospital dentists. For principals, it kind of remain the same being a career average 

James: principals or associates. 

Ian: Or specific principles. Yeah, principals work a bit differently. Right. Okay. Oh, sorry. So principals and associates are the same hospitals, dentists are different. Gotcha. Yeah, yeah, yeah. That’s right. Yeah. So you have to categorize what you are. If you’re a principal or an associate dentist, then you are alwa. You’ve always been career average. If you’re a hospital dentist, then you’ve always been final salary, but now you are career average. 

So associates and principles are now the same as hospital dentists as far as being career average. And the way they did the 2015 scheme is the accrual rate again was better cause it’s now one 50 you might know already. So went one 80th on. One 54th. But again, you have to work even longer to get the benefits because now retirement age is state retirement age, which was currently 67 or 68, but by the time you get to retirement, James or me, it’s gonna be probably 70.

Cause state retirement age will move back. There’s no question about that. And again, this 2015 pension there’s also no automatic lump time at retirement. It’s just a pension income. And that’s basically the three schemes. So, what you’ll find is that a lot of people will have two schemes.

They’ll be in the 95 and the 2015, or the 2008 and the 2015, most likely. I’ve also seen people in all. So you’ll have a different combination of different benefits in these three schemes. And that’s kind of the summary of how it, how it works as different schemes. 

James: You know, I’m super intrigued to break down how the payouts look if you’re in two, three schemes, how those combos look.

Let’s jump into that in just a moment. Let’s delve down to a little bit more of a fundamental level. We use the term accrual. Let’s bear in mind that for some people listening to this, that may even be new to them in itself. Let’s talk about accrual rate and then let’s talk about what I just mentioned. How does the accrual rate work? 

Ian: So to put it simply the way the accrual rate works, the way the NHS pension work, there’s only two ways that your pension, or three ways actually your pension grows. It is years of service salary, and I. So the way they work it out, if we look at the 2015 scheme, cause everybody’s in that scheme now, that’s the easy way to work it out.

If you earn 54,000 pounds a year, then for working one year in the nhs, you accrue one 54th of 54,000 pounds, which is a thousand pounds. So you work one year, you earn 54,000 pounds, you earn a thousand pounds of pension benefit. And that’s how the accrual rate works. It’s obviously different in the old legacy schemes, the 95 and 2008.

It was one 80th and one 60th and 1 54, but effective, that’s how it works. If you earn 54,000 pounds, 1 54 for that. Is a thousand pounds, and that is an annual pension you’ll build up every year if your pension remains, sorry, if your income remains at 54,000 pounds. And what 

James: We should mention as well is that that does not mean you’ll be contributing 1000 pounds.

You actually contribute more than that. You contribute effectively your membership fee, which of course is calculated effectively via banding. So if you earn 10,000 nhs, it’s what, like you maybe know better than me, five. Yeah. And then if it’s like when you get to the next band, it’s more and more and more.

So that’s your membership fee. 

Ian: Exactly. Yeah. So that’s, that’s the, that’s the exactly the right phrase to call it. It’s kind of a membership fee, so it doesn’t matter what you pay towards this pension, it won’t affect what you get from this pension. So it’s banned. So the most you pay is 14.5% and the least is, I think it’s 5.2.

James: Awesome. And then there was one thing that we wanted to touch upon earlier, which I just mentioned, and it was after the accrual rate, and that was, remind me, it was in my head just two 

Ian: seconds ago. Was it the lump sum you get on some and some you don’t get on the lump sum. All right. 

James: Thanks for reminding me. It was about the payouts and how those.

Depending on, cuz what you’ve given us already is a very clear message. If you’re in the 2015 scheme, when we hit state pension age, then we get paid the passive income for the rest of our life based on whatever pot that we have. Effectively. How does that look? So that’s super clear. Let’s say we have somebody who’s in 2008 and 2015.

Does that mean they get part of their pot paid when they hit 65, I believe it was from memory and then part of their pot at State Pension Edge? How does that look? 

Ian: Yeah, exactly right. So, so you, you’ll have two different pots that are available to you and they’re available at different times. So if you go to the extreme, let’s just, You have 1995 benefits and 2015 benefits.

What that means is when you get to 60, you can unlock your 1995 benefits, but you’ve gotta wait seven years to unlock the 2015 benefits. So you’ve either gotta kind of carry on working or do this retirement return when you can take a pension and kind of carry on working. So there’s a, there’s a bit of a disconnect there.

It’s less, it’s less severe. It’s the 2008 pension. The 2015 pension, Cause it’s only like a two or three year gap there. But yeah, effectively when you retire from the nhs, you don’t just retire. You’ve got two different dates and you need to kind of plan how you do that. You need to think about that in advance.

James: How does that look, that sort of partial retirement? Do they negotiate reduced hours reduced. Income. How does 

Ian: That work? Yeah, so what normally happens is you, you, you agree with your practice or, or your principal. If they’ll take you back, first of all, and then you retire, you take your, what we call the legacy benefits, which are the 1995 or two eight.

You take those benefits and then you can come back to work and probably reduced hours because you could probably work two days a week and earn the same cause you’ve got your pension income coming in and then that will kind of sustain you. The age is 67 or 68 when the rest of your pensions available, 

James: And are you required to do that? Are you required to reduce your hours?

Ian: No, you can actually come back and work almost whatever you want as long as there’s an agreement with your practice effectively

James: Interesting stuff. I did not know that. Okay, thank you. Let’s change gears now and talk about allowances, because what we’ve done just then is give everybody a really nice, concise summary of how the pension works, how the contributions work, and how we are remunerated.

When we are reimbursed towards the end of our career, when we reach retirement age effectively, annual allowances, 40,000 pounds, is the pension annual allowance, is that something we need to worry about when we’re contributing solely via or NHS pension? Are we likely to exceed that? Also, and also then what we’re gonna do is we’re gonna chuck in a sip and other pensions as well.

But let’s look at it purely from the perspective of NH as tensions, just for the moment. 

Ian: Yeah, so the NHS pension with the way annual allowance works is something you can’t control. So it’s something you definitely need to be aware of. And whether you breach annual allowance would depend on how much NHS work you do and how much your NHS earnings are.

So the first kind of myth to get rid of, I think we’ve done it already, is that your pension contributions have no bear. On your pension growth. That’s the first thing to talk about. And you, you said called, think of it as a membership fee. That’s the exactly the right way to view it. Now, the way your pension grows for a, a defined benefit scheme, which is the NHS scheme is, is all to do with how much your pension grows in any given tax year.

So what they do is they look at the value of your pension at the start of the year. They increase it by inflation, and they look at the pension at the end of the year and however much is grown by, they take that figure. They multiply it by 16, and that tells you your pension growth. Okay? And that’s how it works within the a defined benefit NHS scheme.

So you can’t control that. It just kind of happens because inflation impacts that as well. So that’s something you can’t drop when you’re looking at annual allowance for, and won’t be chopping ahead here for a sit or a personal pension. It’s much simple. What you physically contribute to a, a sip or a personal pension will count towards your 40,000 annual allowance.

So if you pay 20,000 pounds into your pension, your personal pension, then you’ve used 20,000 pounds of your 40,000 annual allowance limit. Right. 

James: Got you. So if I’ve understood that correctly, basically it’s not really, we only have to partially think about this when we’re contributing solely towards the NHS pension because we’re not likely to exceed it unless our income is really, really, really high ticket.

Have I understood that correctly? 

Ian: Sort of, yeah. It’s hard to judge it. But it does really dictate, and it can be controlled by your NHS earnings. If you’ve only got small NHS earnings, then it’s unlikely you’re gonna breach this 40,000 based on your nhs work alone. If you have more significant NHS earnings, then you could be close or go over this 40,000.

There’s also a caveat to this for higher earners, if you’re a higher earner, then there’s something called annual allowance tapering. And once you earn over 200,000 pounds, Then your 40,000 pounds annual allowance that you have could diminish down to as little as 4,000 if you’re a higher earner. So you have to be, you have to be careful of these things.

There’s not really a blanket yes or no answer every, every individual’s different, and just take stock of your own situations. What I would say, 

James: Cool. All right. We could probably delve loads deeper on that, but I think that’s enough complexity for today. That’s the perfect level of understanding that we need to proceed because we want to keep this quite high level without boiling delve and down right down into the nitty gritty.

Okay, so you touched upon this SIP and NHS pensions. How do we mitigate this? How do we be aware of exceeding our annual allowance? 

Ian: Yeah, so you just need to be in control of it, I guess. So to find out where you are in relation to your NHS and how much that has grown each year, you can request from the NHS Pensions Agency an annual allowance statement.

And what this statement tell you is how much your pension has grown for the previous tax year. So if you request one now, you’ll get your pension growth for the 2122 tax year plus the three previous tax years. And if you look at that and think, actually there’s a bit of headroom. I haven’t used much of my allowance, then actually a personal pension could be a way to actually go back and say, Actually, look, let’s put a bit more money into a pension.

Cause pensions are really good and they’re very tax efficient. So you can go back and use what’s called carry forwards, which means if you haven’t used all of your pension allowance, this 40,000 pension allowance in the three previous years, you can actually go back. Retrospectively use it with a personal contribution to the sip, for example.

So it’s just about getting those two working. If you’ve been very close to your annual allowance based on your NHS work, then a private pension might not be the appropriate thing for you. And you might wanna think about other things like ISIS and things like that. So just kind of take stock, but request an annual allowance statement and that will give you a bit of a headroom check on where.

James: Awesome. Thank you for that. Let’s move forwards and onto the lifetime allowance now. Cause this is the one that we are most likely to need to watch art for, right? Yeah, 

Ian: It could be. It’s funny, it’s the one that’s got the most press, but it’s, I’m pretty less worried about lifetime allowance than annual allowance, if I’m honest.

But it’s certainly something to consider 

James: Actually. Do you know what, Just before we do, how does that, before we do lifetime allowance, how does that penalty. For us exceeding the annual allowance. Let’s talk about that because that’s gonna put some meat in the bone for what you’ve just 

Ian: Said. Yeah, definitely.

Definitely. So, yeah. Right. So the way the annual allowance works is any growth you have in your pension or any pen personal. SIP contributions that you make that exceed 40,000 pounds, they are taxed at your marginal rate. So marginal rate means if you’re a basic rate taxpayer, they’re tax at 20%.

If you’re a higher rate taxpayer, they’re taxed at 40%. If you’re additional rate taxpayer, they’re taxed at 45%. But you can also use that carry forward facility for this as well. So say for example, One tax year, you have pension growth. That’s 50,000 pounds, let’s just say. So you know you’re 10,000 over, right?

But if you go back three years and realize that actually in the three previous years you’ve got some unused allowance, you can drag it forward to kind of offset that. 

James: That works retrospectively. Does it work prospectively? Is there a rollover? 

Ian: No, it only works backwards, not forward, of course. Otherwise, that’d be really good.

But yeah, they don’t let you do that. Funnily enough, actually, there’s a weird anomaly, which we’re gonna talk about later when we talk about cpi, where you can have negative and you allowance pension growth. And funnily enough, so say for example you have minus 5,000 pounds annual allowance, which can.

You can’t actually use that for anything. They just class that as a zero growth input rather than a minus five you can carry forward, if that makes sense. 

James: So you mean, you mean if we, if we’re, if we’re 5,000 pounds off Actually can, yeah. Can we just cover that again? So minus 5,000, how would that situation arrive?

Arrive? 

Ian: Yeah. So, it could arise and we’re gonna discuss this in a bit so I maybe jump the gun, but CPI inflation. . When one year there’s high inflation and the following year there’s low inflation, it can actually, cause your pension value should be less than the year before for annual allowance.

And it doesn’t happen very often, which is why it’s a bit of a anomaly. It’s not common. But the situation we’re in now with inflation is it could become a reality actually. So if there was high inflation one year and the following year there was lower inflation, there’s a chance your pension growth could be minus.

A minus figure rather than a plus figure. So for example, the one I just said, let’s just say your pension growth was minus 5,000, but you can’t do anything with that is class as a zero input. You can’t use that minus 5,000 pounds to offset a future gain, if that makes sense. 

James: Yeah, I think I got it a little bit more just then.

Thank you for that. And you know what, we’re gonna cover it in more detail later anyway, so we’re all good. Okay, cool. Annual allowance. We’ve nailed it. We’ve done it to death. Let’s talk. Let’s now talk about lifetime allowance and how does that look? Maybe, maybe it might be nice to cover the lifetime allowance, what it is, first of all, and then develop the concept from there.

Ian: Yeah, definitely So, so annual allowance, we’ve talked about this is an annual limit that your pension and grow. Lifetime allowance is different. This is how much can your pension pot be over your lifetime before you have to pay any additional tax. And this limit is set at 1.03 million and a hundred pounds, which sounds like a really enormous figure actually, but it’s very easy to breach, especially if there’s, you know, good NHS earnings in there.

So the way it works is any, any pension you have up to 1.0 7 3 100. There’s, there’s no, all you pay is normal income tax on that pension when you draw it. Yeah. Like a normal store. Yeah. Any pension growth over 1.07, 3 million, you’ll pay an additional lifetime allowance tax charge on that excess when you take that pension at retirement, so, mm-hmm.

Whenever you choose to retire and the taxation it can be different depending on how you take it. If you take the excess as an income, then the tax is 25%. If you take the excess growth over the 1.073 million as a lump sum, then it’s 55% tax charge. So that, so it depends how you text. There’s two different tax charges, and these are in addition to your normal income tax charges.

So, Lifetime allowance is certainly something that you need to be aware of for sure. 

James: 100%. And the interest, and or should I say, worrying thing about the lifetime allowance is how the government have played with it over the last few years. And let’s hope that trend doesn’t continue because maybe you’ll know these figures better than me.

But what was it like in 2012? It was like 1.83 million, then it was 1.5, then it went to 1 million. Now let’s back up a little bit because the, it is index linked, I believe, as well. Exactly. Yeah. So let’s hope that trend doesn’t continue. 

Ian: Yeah. Well it’s, it’s frozen until 2024. But, but now we’ve got a new, you know, a new prime minister.

Whether they view that differently, we don’t know. So watching the space to see what happens there. 

James: It’s the pension kitty. They always read it. Exactly. So lifetime allowance, annual allowance. We’ve pretty much covered the majority of things we need to consider when it comes to the NHS pension. Let’s talk about the mcle judgment.

Ian: Oh, that’s a fun one. Yeah. Okay. So so mcle judgment this is all to do with when the government introduced the 2015 pension scheme. What happened was when they introduced this 2015 pension scheme, there was a rule about who moved into this pension scheme and who didn’t. And just to summarize it, to put into perspective, effectively what happened was around about two, 2015 older members didn’t have to join this 2015 scheme at all, whereas younger members did.

And this rule was a bit complex. So what the rule was, was, and they said if you were within. 10 years of your normal retirement age, as of 2012, you didn’t have to move into this 2015 scheme. So say for example, you’re in the 1995 scheme and you were below the age of 50 at 2012, you didn’t have to go into this 2015 scheme.

You just stayed in your old legacy scheme, didn’t worry about things you carried on as you. If you were under 50 in 2012, then basically you were forced to move into this 2015 skin. There was no choice. Now, saying this out loud, you think, Well that doesn’t sound fair, does it? And it’s not fair. Cause what’s happening here is age discrimination.

So older members didn’t have to move into the scheme and younger members. So there was a court case that was brought against the nhs pension and they deemed it to be unlawful. This rule was ridiculous. So the 2015 scheme itself wasn’t unlawful, but it was this rule about who went into who didn’t. So what they decided to do was they tried to figure out how to unpick this, and what they decided to do was they decided that between.

2015 and 2022, whoever had, whoever was an eligible members at that point, what was gonna happen was if they moved to the 2015 scheme as of 2015, they were gonna move everyone back into the old legacy scheme for this seven year period, which is, it’s called the Remedy period, which is between 2015 and 2022.

Effectively to put it into context, if you were, if at 2015 you were moved into this 2015 scheme for the next seven years, they’re gonna move you back into the old legacy scheme. So that’s what they’re doing. And then what happens is there’s, there’s further decisions to be made because when it comes to retirement, you are then given a choice about whether you want your pension benefits to be calculated in the 2015.

Or in your legacy scheme for that seven year remedy period. So the period from 2015 to 2022, they’ll say to you, Look, if you, if you calculate and have your pension calculated in the 95 scheme, for example, this is what you’ll get if you have your pension for this remedy period calculated in the 2015 scheme.

This is what you get and then you pick the outcome that suits you the best you have to make a choice at retirement. So it’s really confusing. Don’t expect to understand it straight away cuz it’s really complex and it’s still rumbling on. But that is basically what’s happening. They’re, they’re trying to unpick what they’ve done and people that are moved to the 2015 scheme got moved back to the legacy scheme.

And then you choose at retirement if you want that choice to happen. Were you finished just then? Yeah, pretty much. Yeah. I’m just waiting to see what your face looks like to see if that made any sense. 

James: You, you know what? The NHS pension is a beast of a subject. It really is, and it almost requires a flipping degree in itself to understand, but you know.

That would be helpful for people who are listening who find themselves in that scenario, even if it means that they know that they need to get some help on that once some professional help. So it’s always helpful. It’s always ROI positive. Cool. Right. Then we touched upon this earlier, but I wanted to flesh it out in more detail just before we wrap things up, cuz I actually think that what we’ve done today is the perfect amount of complexity versus not going too deep.

Because of course, as we said at the beginning, this is supposed to be an all in one, all under one roof, NHS Pension podcast, and we could probably make up about three or four podcasts on this. I’m, we could probably make a podcast in the Mcle judgment on its own by the signs of it. So let’s talk about the CPI rate.

And something called the disconnect, which you’ve, you’ve, I just see that you’ve sent me over here on the items for discussion today, but I’m actually a little unfamiliar with this myself, so it might be nice to explain this. 

Ian: Yeah. So this is quite a current topic and it’s only come to light because of the current inflation world.

And let me explain why this is gonna cause a, or could cause a problem. And it’s all to do with annual allowance. So we go back to annual allowance. So if you remember, the way we calculate annual allowance for your NHS pension is the value of your pension. At the start of the year, we increase it by inflation and it’s the value of the pension at the end of the year.

And then the difference is how much your pension grows by, But, Or you wanna ask the question? 

James: No, no, no. I held up my three fingers there cuz I thought you were gonna say contributions, inflation. And then there was something else that you mentioned earlier. But that’s, that’s something else. 

Ian: That’s what makes your pension grow. But ah, yeah, this, the calculation to work out how it works and particularly inflation. So as I value pension, the of year, but increase by inflation. But the inflation rate they use is from the previous years September rate. So for example, last year’s September CPR rate was 3.1%.

So at the start of the year, they increase your pension by 3.1%. Then you have a full year of working in the, in the nhs. But what also happens with your pension again, especially if you’re a principal or an associate, is that every year your pension is what we call revalued, which means that your pension put, you’ve recruited in previous years gets increased.

And what they do is they increase your existing pension pot by CPI in the current. Plus 1.5%. So let me explain how this works. So what they’ve done at the start of the year, they’ve increased your pension by 3.1%, but your pension has actually grown by inflation in the current year and the current year’s.

Infl inflation isn’t 3.1% is closer to 10%. So effectively there’s an additional 7% worth of growth that’s happened purely down to I. And it’s nothing to do with how much your pension’s really grown by It’s only inflation because when they, when they increase your pension at the start of the year, by inflation, they’re assuming that inflation at the, at the previous year was similar to what it is in the current year and therefore there’s no disconnect.

So what should happen is, they should increase your pension at the start of the year. 0.1% say, and the following year they would expect inflation to be similar so that there’s no disconnect, there’s no big growth just for argument’s sake. But current inflation environment we’re, we’ve from inflation from point, probably 10.

So this is, this is creating a pseudo growth in your pension. And people that wouldn’t normally get an annual allowance tax charge, may will get an annual allowance tax charge this year, purely down to inflation. Quite complex. Again, I know, and there’s lots of figures bouncing around here, but this hopefully gives you bit of a starting point.

Does that make a bit of sense? 

James: Inflation is high. Pretty much. Yeah, it does. Yes. In summary, inflation is high. So therefore, keep an eye on your contributions versus your annual launch effectively. 

Ian: Yeah, and, and just because inflation’s high, there’s not normally a problem. It’s just the way they view it, they use. CPI from the previous year in one of them, and CPI from the current year in another one. So that there’s a disconnect you’ll hear talked about in the press. 

James: That was the word that I was unfamiliar with. Disconnect. But you’ve, you’ve, Yeah. That’s good. Interesting to hear. 

Ian: Yeah, so it’s quite complex and it might happen this year, maybe one other year and then you might not see it again.

So it’s a bit of an anomaly, but it’s something you need to be aware of now, especially people with big pension pots already. You know, principals, things like that. Associates, you’ll see potentially some impact around annual allowance of this when you wouldn’t. 

James: Got you. Thank you so much, Ian. You’ve done a wonderful job of explaining the NHS podcast today, the NHS Pension Soy A Be Pardon on this podcast today.

Thank you so much for your time. If anybody’s interested in speaking to Ian, you can find Ian on the group, Ian Hawk. Feel free to search his name in the members bar. Ian, thank you once more for spending your time with us generously today. I hope to speak to you once again very soon.

Ian: Thanks, James.