NHS lease scheme

Author
Discussion

Fast Bug

11,597 posts

160 months

Friday 11th September 2020
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At the moment BIK is 0% for electric vehicles, be aware this could change in the future though

ADGAH

4 posts

42 months

Friday 11th September 2020
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Fast Bug said:
At the moment BIK is 0% for electric vehicles, be aware this could change in the future though
Yes I’ve had a look at the projections for BIK for the next few years and you are looking at £131 for 2021/22 so still looking at a good deal with the personal allowance increases too

CheesecakeRunner

3,707 posts

90 months

Friday 11th September 2020
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ADGAH said:
CheesecakeRunner said:
ADGAH said:
Does anyone know what sort of impact this will have on your tax code? I am trying to work out the monthly take home we will have but it’s difficult when you don’t know what your new tax code is going to be.

It will be a 9094.97 sacrifice on a 30615 salary, meaning that gross wage is now, 21520.03. Our current tax code is 1285L, does anyone know what this would change too?
What's the BIK charge for it? Simplistic way is to subtract that from the personal allowance of 12850, and assuming it's above 0, divide the result by 10 and stick the L back on.

E.g BIK of 8000. 12850 - 8000 = 4850. So 485L code.

If the result is a negative number it gets a bit more complex, when that happened to me I got a T code.
It’s is a purely eletric car, Mercedes EQC, so I think the BIK is £0 in that case would my tax code not change.
That’s correct for 20-21. For 21-22 it’s 1% and 22-25 it’s 2%. You can get the actual numbers using comcar.co.uk and apply the formula above. It’ll have a negligible effect on your tax code as a 20% tax payer.

Chris32345

2,082 posts

61 months

Friday 11th September 2020
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Hand the money to charity
You can pay less tax help people and then then look less like a**** bragging about how much money your on

covmutley

3,012 posts

189 months

Friday 11th September 2020
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As said earlier, to keep doing these leases would seriously hurt a pension.

But its currently a perfect storm of good lease price, tax saving and no (and ultra low) BIK.


gangzoom

6,254 posts

214 months

Saturday 12th September 2020
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Andrew[MG] said:
If this is correct then I hope there are a lot of flags before someone signs up for the deals. If there's not then I'm sure there will be lawyers and compensation claims going in when people realise they have lost money from their pension.
There is ZERO pension advice on NHS websites apart from one line that says it may effect pensions. The NHS don't really care, they just want to reduce their NI/Pension costs, and the staff are far too disengage to bother getting angry.

I can get one of these 'deals' approved in under 5 minutes from my work intranet, without any kind of real explanation to the final costs are.

gangzoom

6,254 posts

214 months

Saturday 12th September 2020
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covmutley said:
As said earlier, to keep doing these leases would seriously hurt a pension.

But its currently a perfect storm of good lease price, tax saving and no (and ultra low) BIK.
Which raises the point why bother hurting your longterm pensions for very very short term enjoyment?

Delayed gratification is something anyone working in the NHS will be accustomed too, these deals are the exact opposite.

For some it will work, but its the total lack of explanation on total costs after pensions which is making these deals so disingenuous. Here is ALL the info I get about if from our trust. A headline figure of getting a £50k+ car for £567/month with no deposit......But it doesn't even mention the gross salary reduction let alone pension effects, the true figure for me is around £900+/month which is similar to all other non NHS deals.

Anyone signing up needs to do their own maths.



covmutley

3,012 posts

189 months

Saturday 12th September 2020
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But you could say that about anything? Why have a nice car, or a holiday, or any luxury, and put it in a pension instead.

We are not doing it for a few reasons, but my wife could get one through nhs fleet solutions their quote us very clear on what your tax saving is and what your pension 'saving' is. (That is a bit misleading I think!)

The lost pension isn't that much, especially in the context of such a generous pension scheme.

Doing this scheme just once for an EV for a couple of years looks like cheap motoring. Anything more I agree will seriously hurt pension. Also, it should probably be for better paid employees to get cheap motoring, rather than less well paid to stretch themselves to something they struggle to afford. But again, that applies to any financial decision.

Edited by covmutley on Saturday 12th September 09:03

ADGAH

4 posts

42 months

Tuesday 15th September 2020
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Chris32345 said:
Hand the money to charity
You can pay less tax help people and then then look less like a**** bragging about how much money your on
I mean I do work for a charity (Partner works for the nhs) and donate every month to multiple so unless you have anything constructive or nice to say, then I would just save your time and energy.

alfaeejit

10 posts

49 months

Monday 1st February 2021
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Hi folks - just wondering if there are still good tusker salary sacrifice deals on the go? I'm moving jobs soon and will have access to the local authority tusker scheme (same as nhs) so am quite keen on going EV if the numbers stack up....

Benri

11 posts

56 months

Saturday 20th February 2021
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My wife has access to CPC NHS Salary sacrifice lease deals, any one ordered an EV or had experience?

dmsims

6,452 posts

266 months

Saturday 20th February 2021
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Benri said:
My wife has access to CPC NHS Salary sacrifice lease deals, any one ordered an EV or had experience?
We ordered am ID3 being delivered in March - all done online and easy. Very inexpensive overall

Just beware the pension implications (none for us)

bobsavage789

647 posts

53 months

Saturday 20th February 2021
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Apologies if someone has already explained this earlier on (I have read through, but in amongst the pointless arguing about mileage claims and pension caveats, couldn’t find an answer to my queries):

I’m flirting with the idea of getting an NHS Fleet car (via my wife, a nurse). Based on the above quote, if I just paid £56.24 a month into her pension fund, would that put her in the same position as if there were no Fleet car, or are there other considerations I’ve missed?

For example, are employer pension contributions affected by salary sacrifice?

Thanks in advance!

zoolando

22 posts

75 months

Saturday 20th February 2021
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bobsavage789 said:


Apologies if someone has already explained this earlier on (I have read through, but in amongst the pointless arguing about mileage claims and pension caveats, couldn’t find an answer to my queries):

I’m flirting with the idea of getting an NHS Fleet car (via my wife, a nurse). Based on the above quote, if I just paid £56.24 a month into her pension fund, would that put her in the same position as if there were no Fleet car, or are there other considerations I’ve missed?

For example, are employer pension contributions affected by salary sacrifice?

Thanks in advance!
Depending on how many years your wife is away from retirement and which NHS scheme year she is in can change the answer to whether a salary sacrifice is something to consider.

To my knowledge, you are not able to top up an NHS pension fund in the way you describe however you could top up a private pension scheme. The latest NHS scheme (2015) is a career average scheme, each qualifying year is revalued by the treasury order % (CPI) for that year and then 1.5% is added. If you are topping up a private pension, it might be worth looking at whether you can get a similar sort of return.

In terms of employer contributions, NHS pension scheme does not work in the same way as regular employer/employee company pension therefore this is not a concern. Your wife will be paying a monthly % contribution to qualify for an NHS pension and this is based upon how much she is earning in that year. If this is the 2015 scheme, the value of her pension for that year is her total earnings after salary sacrifice x 1/54.

At the end of the day, if you are happy with the amount the lease costs and aware of the impact/mitigate, it is unlikely to have a significant impact on her pension.


Edited by zoolando on Saturday 20th February 20:25

Benri

11 posts

56 months

Saturday 20th February 2021
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dmsims said:
We ordered am ID3 being delivered in March - all done online and easy. Very inexpensive overall

Just beware the pension implications (none for us)
Thanks for the reply, I’ve literally just looked today, does the list of available EV’s change regularly? I’m hoping the new Skoda EV is added...

bobsavage789

647 posts

53 months

Saturday 20th February 2021
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zoolando said:
Depending on how many years your wife is away from retirement and which NHS scheme year she is in can change the answer to whether a salary sacrifice is something to consider.

To my knowledge, you are not able to top up an NHS pension fund in the way you describe however you could top up a private pension scheme. The latest NHS scheme (2015) is a career average scheme, each qualifying year is revalued by the treasury order % (CPI) for that year and then 1.5% is added. If you are topping up a private pension, it might be worth looking at whether you can get a similar sort of return.

In terms of employer contributions, NHS pension scheme does not work in the same way as regular employer/employee company pension therefore this is not a concern. Your wife will be paying a monthly % contribution to qualify for an NHS pension and this is based upon how much she is earning in that year. If this is the 2015 scheme, the value of her pension for that year is her total earnings after salary sacrifice x 1/54.

At the end of the day, if you are happy with the amount the lease costs and aware of the impact/mitigate, it is unlikely to have a significant impact on her pension.


Edited by zoolando on Saturday 20th February 20:25
Many thanks for the reply.

She’s a good 30 years or so from retirement.

Having seen this (https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension), I thought one had the option to ‘buy’ additional pension (according to the calculator, my paying in an extra £57.60/month pays an extra £250/year upon my wife’s retirement).

In terms of employer contributions, I found the following rates about the 2015 scheme:

Salary range/Contribution rate
£0-£15,431.99/5.0%
£15,432-£21,477/5.6%
£21,478-£26,823/7.1%
£26,824-£47,845/9.3%
£47,846-£70,630/12.5%
£70,631-£111,376/13.5%
£111,377+/14.5%

If employer contributions are based on gross pay, she’d lose a significant further amount (about another £56/month by my calculations): is this right?

dmsims

6,452 posts

266 months

Sunday 21st February 2021
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Benri said:
Thanks for the reply, I’ve literally just looked today, does the list of available EV’s change regularly? I’m hoping the new Skoda EV is added...
It does seems to, initially looked at the Zoe, e208 but they were ruled out, then the ID3 1st Edition appeared and disappeared as quickly, then all the ID3 models got listed

Lot's of pretend 4x4's as well

syl

693 posts

74 months

Sunday 21st February 2021
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bobsavage789 said:
In terms of employer contributions, I found the following rates about the 2015 scheme:

Salary range/Contribution rate
£0-£15,431.99/5.0%
£15,432-£21,477/5.6%
£21,478-£26,823/7.1%
£26,824-£47,845/9.3%
£47,846-£70,630/12.5%
£70,631-£111,376/13.5%
£111,377+/14.5%

If employer contributions are based on gross pay, she’d lose a significant further amount (about another £56/month by my calculations): is this right?
That’s employee contributions. Employer contributions are 20.68% (although transitional arrangements means that about 6% is paid centrally this year).

So the NHS pension for high earners particularly, especially with the pensions tax liabilities it generates (following a pay rise, they can even result in a six figure one-off bill far higher than the pay rise itself) is not actually that generous at all anymore. So much so that many of them have opted out. One would expect a payment of more than a third of annual salary to provide a good pension.

Unfortunately you can’t opt out of the NHS scheme and take your employers contribution into a private scheme instead. As such it makes no difference if their contribution is £1 or £1,000,000 - they government pays it to themselves and it isn’t ringfenced.

bobsavage789

647 posts

53 months

Sunday 21st February 2021
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syl said:
That’s employee contributions. Employer contributions are 20.68% (although transitional arrangements means that about 6% is paid centrally this year).

So the NHS pension for high earners particularly, especially with the pensions tax liabilities it generates (following a pay rise, they can even result in a six figure one-off bill far higher than the pay rise itself) is not actually that generous at all anymore. So much so that many of them have opted out. One would expect a payment of more than a third of annual salary to provide a good pension.

Unfortunately you can’t opt out of the NHS scheme and take your employers contribution into a private scheme instead. As such it makes no difference if their contribution is £1 or £1,000,000 - they government pays it to themselves and it isn’t ringfenced.
Whoops: how embarrassing for me...

I take it from your references to the government paying itself the employer contributions, that employer contributions aren’t affected by salary sacrifice, so the actual cost for an NHS lease is the monthly (net) cost the site quotes you + the employee pension contribution..?

zoolando

22 posts

75 months

Sunday 21st February 2021
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bobsavage789 said:
Having seen this (https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension), I thought one had the option to ‘buy’ additional pension (according to the calculator, my paying in an extra £57.60/month pays an extra £250/year upon my wife’s retirement).
Apologies, I didn't realise you could top up in this way. The factsheet and calculator give you all the information which looks good to me. The contribution needs to come from her income and appears straight forwards to set up or do a lump sum. As mentioned by syl the employer contributions are not relevant to the calculation therefore the net cost on the NHS Fleet Solutions calculator should be correct.

As your wife will need to submit the Additional Pension form to her employer/Pension Officer, it might be worth trying to seek advice there before you submit the form. However, I appreciate this might need to be your wife seeking this advice.