Added years/additional pension
The facility to buy ‘added years’ as a way for members to increase their NHS
pension is being replaced. Members of the NHS Pension Scheme members have the opportunity to buy added years by the current method for a limited period providing they made an expression of interest by 31 March 2008.
For those members that made such an expression of interest, added years contracts are set up to start from the member’s next birthday and members can start the contract (on their birth date) on or before 31 March 2009.
So if a member’s birthday on 6 June, they must start their contract on 6 June 2008.
Additional pension
From 1 April 2008 an additional pension purchase facility is available as a means for members to increase their pension, effectively replacing ‘added years’.
Members of the NHS Pension Scheme and the New NHS Pension Scheme (or employers on their behalf) may buy additional annual pension that will provide a maximum of £5000* extra pension a year when they are retired.
Members may buy in instalments or by a lump sum payment. Where they buy in instalments they will be required to pay a fixed amount each month and commit to the purchase over whole years, up to a maximum of 20, or to normal retirement age if earlier. Employers buying on a member’s behalf can only do so by a lump sum payment.
The cost of this facility will depend on how much additional pension the member wants to achieve, and the length of time over which they are prepared to make the extra contributions.
The minimum commitment will be for extra contributions that will provide additional pension of £250 a year on retirement. Payment by this method normally attracts tax relief.
An additional pension calculator can be assessed from this link
* This amount is for 2008/09 and will increase in future years. In line with the Retail Price Index.