NHS lease scheme

[dave_s13]

garpat32 said:

Not true.

We still claim the same regardless, 56p per mile for the first 3500 miles then 20p after that reached per year.

This is across the board at our place and has been in place since the new mileage rules were setup.

From NHS employees page;

https://www.nhsemployers.org/pay-pensions-and-rewa...

22. What about rates of reimbursement for lease car users?

Arrangements for the provision of lease cars to NHS staff will continue to be the responsibility of local partnerships, and informed by HMRC recommended rates.

Well I wasn't fkin lying Gary, but maybe my info is out of date.

I know a lot of my colleagues still think this is the case so stopped bothering with mileage claims. I'll have to make sure they look into it and get on it again. It can be a fair chunk every month if you work from different sites or do home visits.

[loofer]

egor110 said:

I'm a postie and Royal mail run a similar scheme for not only cars but laptops phones etc.

A few people have been stung on tax as it's a benefit in kind .

Not sure why you use the word “stung” when it is clear there are BiK implications for the various benefits.

[garpat32]

dave_s13 said:

garpat32 said:

Well I wasn't fkin lying Gary, but maybe my info is out of date.

I know a lot of my colleagues still think this is the case so stopped bothering with mileage claims. I'll have to make sure they look into it and get on it again. It can be a fair chunk every month if you work from different sites or do home visits.

Any need for the language? No one said you were lying, but, as others have also said that information is wrong.

I can't recall when I ever claimed 50p per mile, and I've been in NHS over 10 years now.

I've had lease cars for 6 of those year's and never claimed as little as 5p, ever.

Again as I pointed out, the arrangement can be agreed locally by each trust.

[browellm]

dave_s13 said:

I know a lot of my colleagues still think this is the case so stopped bothering with mileage claims. I'll have to make sure they look into it and get on it again. It can be a fair chunk every month if you work from different sites or do home visits.

IIRC, the old scheme stopped some time around 2018, but it's quite possible that a salary sac car taken before it stopped would be subject to those old terms until the end of the lease.

[garpat32]

It's all in here

https://www.nhsemployers.org/pay-pensions-and-rewa...

But we are going well off topic now.

We were using this "new" mileage agreement back in 2015.

[Phatbenito]

garpat32 said:

It's all in here

https://www.nhsemployers.org/pay-pensions-and-rewa...

But we are going well off topic now.

We were using this "new" mileage agreement back in 2015.

It’s not “all there” though. It specifically says that they are the rates for “privately owned vehicles”.

You have a company car. Can you find somewhere where it says (I’m not saying it doesn’t) that company car drivers will be entitled to claim the same Agenda for Change rates? You have claimed them. Others haven’t.

It’s not off topic. It makes a big difference to some people’s cost of running a car.

Copy and pasted from your linked site:

Mileage allowances - Section 17
03/07/2017 09:00:00

Rates of reimbursement for the costs incurred by staff who use their privately owned vehicles on NHS business. These rates are reviewed every May and November, using the latest information on motoring and business costs.

[gangzoom]

GT72 said:

My wife’s quote on the Tesla Model 3 Performance was £382pcm for 10,000 miles per year over 24 months.

The impact on her gross salary is a deduction of £7,577 per annum.

As per Mustache’s calculation that’s a reduction of £140 per annum to her annual pension, based upon 1/54. Therefore a reduction of £280 per annum to her pensionable salary for having the car for 2 years. So assuming she takes the pension for 20 years, that’s a reduction of £5,600 in total over a 20 year period.

Your figures don't match what calculators on a NHS trust are showing. A £7,577 per annum is £631/month gross deduction, presuming she as 20 years left to retirement the amount lost is £247/year, so a 2 year deal over 20 years will reduce the pension by £9800.

https://www.benefitseveryone.co.uk/salary-sacrific...

You are right that £631/month gross is cheap for a P Model 3, Tusker which supplies our Trust is showing a P Model 3 at £1000/month gross reduction.

For me a NHS rental P Model 3 at £1000/month gross and 28 years to retirement over 3 years will reduce my pension worth by £25K, in addition to paying around £500/month out of pocket now, making the total cost of a 3 year 'cheap' NHS rental deal £45K - It hard to imagine a more costly way to get into a P Model 3 for 3 years!

Edited by gangzoom on Monday 27th January 20:13

[garpat32]

FFS

there is a section specifically mentioning LEASE VEHICLES which i have already quoted

Leased cars - Q22 - 23

22. What about rates of reimbursement for lease car users?

Arrangements for the provision of lease cars to NHS staff will continue to be the responsibility of local partnerships, and informed by HMRC recommended rates.

And I have no idea why you are quoting the bit about section 17?

[loofer]

Mustache said:

Someone on the previous thread asked me to explain how an NHS lease reduces your pension, with full figures, so I'lll have a go.

The 2015 pension scheme, which anyone under around 57 years old is now on, is a career average based scheme. It is calculated by dividing your annual salary after each financial year by 54, and that amount goes into a 'pot'. You will have extra pots after every subsequent financial year. Each pot is revalued every year, at 1.5% above inflation, so if inflation was 2% in the last year, all the pots are revalued by 3.5%. Once you retire, all the pots are added up, and the total is paid to you annually.

As an example, someone earning 40K throughout their career of 10 years would gat the following pension (ignoring any future inflation):

Year 1: 40,000/54 = £740 compounded by 1.5% for 9 years = £846.11
Year 2: 40,000/54 = £750 compounded by 1.5% for 8 years = £833.60
Year 3: 40,000/54 = £750 compounded by 1.5% for 7 years = £821.29
Year 4: 40,000/54 = £750 compounded by 1.5% for 6 years = £809.15
Year 5: 40,000/54 = £750 compounded by 1.5% for 5 years = £797.19
Year 6: 40,000/54 = £750 compounded by 1.5% for 4 years = £785.41
Year 7: 40,000/54 = £750 compounded by 1.5% for 3 years = £773.80
Year 8: 40,000/54 = £750 compounded by 1.5% for 2 years = £762.37
Year 9: 40,000/54 = £750 compounded by 1.5% for 1 year = £751.10
Year 10: 40,000/54 = £750 compounded by 1.5% for 0 years = £740

Once you add the 10 pots up, it gives an annual retirement income of £7920.02



If someone takes out an NHS car lease of £300/month, that means their salary drops by £3600 to £36,400. So the pot that year will drop from £740 to £650, a £90 decrease, and will be decreased by the length of the lease e.g. 3 year lease = £90x3 = £180 less a year in NHS pension. If a person has 30 years left in work before retiring, that £180 would have been rebalanced every year by at lease 1.5%. That gives £240 less a year.

£240 doesn't sound that much, but that's £4800 on a 20 year retirement, and if you have multiple leases if can add up to much more than that.

It MAY be worth it for higher rate tax payers to take put an NHS lease, but I wouldn't do it as a 20% tax payer myself.

Depending on how good the lease deal is, can this not be negated by increasing pension contributions based on what you’re saving on the lease?

If your budget for a private lease was £300 anyway then you would have to earn £360/£420 gross to achieve that £300 net.

If the car is worth the deal then increase contributions by £60/£120.

This is all theory in my head. I’m not an NHS employee but my employer operates a salary sacrifice scheme (both Defined Benefit Career Average and a Defined Contribution scheme). Employer pension contributions or VR and other benefits based on pensionable pay are not affected by salary sacrifice

[dave_s13]

garpat32 said:

dave_s13 said:

garpat32 said:

Well I wasn't fkin lying Gary, but maybe my info is out of date.

I know a lot of my colleagues still think this is the case so stopped bothering with mileage claims. I'll have to make sure they look into it and get on it again. It can be a fair chunk every month if you work from different sites or do home visits.

Any need for the language? No one said you were lying, but, as others have also said that information is wrong.

I can't recall when I ever claimed 50p per mile, and I've been in NHS over 10 years now.

I've had lease cars for 6 of those year's and never claimed as little as 5p, ever.

Again as I pointed out, the arrangement can be agreed locally by each trust.

You have a very abrupt, brusque and irritatingly contrary way of writing your replies, so I threw a fk in there for effect. That's all.

I'm more confused about NHS salary sacrifice schemes now than before I entered this thread btw!

[garpat32]

dave_s13 said:

You have a very abrupt, brusque and irritatingly contrary way of writing your replies, so I threw a fk in there for effect. That's all.

I will take that as a compliment, cheers.

[Denno B]

Trying to get my head round this.
So an E-tron at £315 month on salary sacrifice if taken on over 2 years would reduce the pension pot when retiring in say 30 years from now by potentially £10-20k?

[Downward]

loofer said:

Mustache said:

Someone on the previous thread asked me to explain how an NHS lease reduces your pension, with full figures, so I'lll have a go.

The 2015 pension scheme, which anyone under around 57 years old is now on, is a career average based scheme. It is calculated by dividing your annual salary after each financial year by 54, and that amount goes into a 'pot'. You will have extra pots after every subsequent financial year. Each pot is revalued every year, at 1.5% above inflation, so if inflation was 2% in the last year, all the pots are revalued by 3.5%. Once you retire, all the pots are added up, and the total is paid to you annually.

As an example, someone earning 40K throughout their career of 10 years would gat the following pension (ignoring any future inflation):

Year 1: 40,000/54 = £740 compounded by 1.5% for 9 years = £846.11
Year 2: 40,000/54 = £750 compounded by 1.5% for 8 years = £833.60
Year 3: 40,000/54 = £750 compounded by 1.5% for 7 years = £821.29
Year 4: 40,000/54 = £750 compounded by 1.5% for 6 years = £809.15
Year 5: 40,000/54 = £750 compounded by 1.5% for 5 years = £797.19
Year 6: 40,000/54 = £750 compounded by 1.5% for 4 years = £785.41
Year 7: 40,000/54 = £750 compounded by 1.5% for 3 years = £773.80
Year 8: 40,000/54 = £750 compounded by 1.5% for 2 years = £762.37
Year 9: 40,000/54 = £750 compounded by 1.5% for 1 year = £751.10
Year 10: 40,000/54 = £750 compounded by 1.5% for 0 years = £740

Once you add the 10 pots up, it gives an annual retirement income of £7920.02



If someone takes out an NHS car lease of £300/month, that means their salary drops by £3600 to £36,400. So the pot that year will drop from £740 to £650, a £90 decrease, and will be decreased by the length of the lease e.g. 3 year lease = £90x3 = £180 less a year in NHS pension. If a person has 30 years left in work before retiring, that £180 would have been rebalanced every year by at lease 1.5%. That gives £240 less a year.

£240 doesn't sound that much, but that's £4800 on a 20 year retirement, and if you have multiple leases if can add up to much more than that.

It MAY be worth it for higher rate tax payers to take put an NHS lease, but I wouldn't do it as a 20% tax payer myself.

Depending on how good the lease deal is, can this not be negated by increasing pension contributions based on what you’re saving on the lease?

If your budget for a private lease was £300 anyway then you would have to earn £360/£420 gross to achieve that £300 net.

If the car is worth the deal then increase contributions by £60/£120.

This is all theory in my head. I’m not an NHS employee but my employer operates a salary sacrifice scheme (both Defined Benefit Career Average and a Defined Contribution scheme). Employer pension contributions or VR and other benefits based on pensionable pay are not affected by salary sacrifice

You can’t make additional payments in the 2015 scheme but you can take out an additional AVC pension.

[Downward]

Denno B said:

Trying to get my head round this.
So an E-tron at £315 month on salary sacrifice if taken on over 2 years would reduce the pension pot when retiring in say 30 years from now by potentially £10-20k?

NHS pension is 9.3% for 40k. So let’s say £3900 per annum paid in.
Reduce your salary by £4k to £36k and only £3348 goes into your pot.

Plus the NHS pay in an equivalent of 14% plus inflation and rpi or cpi.

If your retiring at 55 or 60 with potentially another 25 to 35 years to live it’s a fair amount.

[Denno B]

It does seem like false economy then if getting a great deal of £7.5k over two years for an E-tron but end up with potentially several thousand £’s less in the pension pot come retirement. The real figure is more like £15k based on those rough calculations for two years in the car.

[Downward]

Denno B said:

It does seem like false economy then if getting a great deal of £7.5k over two years for an E-tron but end up with potentially several thousand £’s less in the pension pot come retirement. The real figure is more like £15k based on those rough calculations for two years in the car.

And ignore the wealthy folk crowing at getting a Tesla, Think of the majority of staff in the NHS paid way less and being allowed with no credit check to lease a car priced beyond their means.
As our FD said we have to have an obligation to the welfare of the staff in the NHS.

[covmutley]

So say you dont do the deal and get an etron deal, and instead get one on a private lease at £600 a month. Call it £200 a month more X24 months = £4800 more.

Then you invest what you have saved using the NHS deal , put that in the stock market for 25 years, and if it grows at 7%, you would end up with over £26k. Im sure there's holes in this.

But the facts are, its a cracking deal, but saving money is good in the long term.

The best answer is probably that people should be looking for ways to get a reasonable car for cheaper and save the difference for the long term, rather than use a great deal to have a car they couldntt otherwise afford. ANd in the same way you should holiday in the uk and save for retirement rather than holiday abroad. Pays your money, take your choice.

Edited by covmutley on Monday 27th January 22:45

[garpat32]

Downward said:

Denno B said:

It does seem like false economy then if getting a great deal of £7.5k over two years for an E-tron but end up with potentially several thousand £’s less in the pension pot come retirement. The real figure is more like £15k based on those rough calculations for two years in the car.

And ignore the wealthy folk crowing at getting a Tesla, Think of the majority of staff in the NHS paid way less and being allowed with no credit check to lease a car priced beyond their means.
As our FD said we have to have an obligation to the welfare of the staff in the NHS.

Have you's actually looked at the "deal"?

Seems to be a lot of people here "know" what is a good deal or not, but do not actually have a clue what they are on about. It's like reading the Sun headlines man

[Phatbenito]

garpat32 said:

FFS

there is a section specifically mentioning LEASE VEHICLES which i have already quoted

Leased cars - Q22 - 23

22. What about rates of reimbursement for lease car users?

Arrangements for the provision of lease cars to NHS staff will continue to be the responsibility of local partnerships, and informed by HMRC recommended rates.

And I have no idea why you are quoting the bit about section 17?

Gary. Your FAQ are WITHIN section 17. Scroll to the top of the page:

Home / Pay pensions and reward / Agenda for change / NHS Terms and Conditions of Service / Mileage allowances - Section 17 / Mileage allowances FAQs

And as for what you’ve just quoted above. Read it again.

“Arrangements for the provision of lease cars to NHS staff will continue to be the responsibility of local partnerships,....”

This means local partnerships decide who is entitled to a (non-sacrifice) company car. (Generally staff who need a car for their role).

“.... and informed by HMRC recommended rates.”

And this means they can claim HMRC approved mileage rates.

It does not say anything about company car drivers claiming 56p per mile.

[garpat32]

Ok, I give up.

You either can't be bothered to actually read and take notice of the official NHS "guidelines" quoted, or you are just being argumentative for the sake of it.

Well done.