NHS lease scheme
Discussion
Sorry to drag up an old thread.
We're at the point where an EV through NHS Salary Sacrifice actually makes sense with reduced fuel costs and being maintained.
My wife has worked for the NHS (Non medical) for around 15 years. She's at least 15 years from retirement. I believe she is on the 2008 scheme, definitely not the latest 2015. The negative impact per month to her contribution would be around £60.
1. Would there still be an ultimate pension reduction and if so how much by? I understand the Pot amount for 2015 version but not how that actually adds up to what you receive each month.
2. Can you top up a potential pension deficit?
We're at the point where an EV through NHS Salary Sacrifice actually makes sense with reduced fuel costs and being maintained.
My wife has worked for the NHS (Non medical) for around 15 years. She's at least 15 years from retirement. I believe she is on the 2008 scheme, definitely not the latest 2015. The negative impact per month to her contribution would be around £60.
1. Would there still be an ultimate pension reduction and if so how much by? I understand the Pot amount for 2015 version but not how that actually adds up to what you receive each month.
2. Can you top up a potential pension deficit?
Nigel-maxgs said:
Sorry to drag up an old thread.
We're at the point where an EV through NHS Salary Sacrifice actually makes sense with reduced fuel costs and being maintained.
My wife has worked for the NHS (Non medical) for around 15 years. She's at least 15 years from retirement. I believe she is on the 2008 scheme, definitely not the latest 2015. The negative impact per month to her contribution would be around £60.
1. Would there still be an ultimate pension reduction and if so how much by? I understand the Pot amount for 2015 version but not how that actually adds up to what you receive each month.
2. Can you top up a potential pension deficit?
The current 2015 NHS scheme is career average earnings. 54ths IIRC. Ignore the 'Pot' amount, it has no bearing on the pension received unless you exceed LTA (not a thing currently). It would be easiest to read around the subject by looking for Tony Goldstone on Twitter/X etc as he is about the only person fully versed in these things (and I do include many FAs in that sweeping statement).We're at the point where an EV through NHS Salary Sacrifice actually makes sense with reduced fuel costs and being maintained.
My wife has worked for the NHS (Non medical) for around 15 years. She's at least 15 years from retirement. I believe she is on the 2008 scheme, definitely not the latest 2015. The negative impact per month to her contribution would be around £60.
1. Would there still be an ultimate pension reduction and if so how much by? I understand the Pot amount for 2015 version but not how that actually adds up to what you receive each month.
2. Can you top up a potential pension deficit?
A lease car will reduce your annual pensionable salary by the gross cost of the lease. So if you lease a car at £500pm then your pensionable salary is reduced by £6000 pa. Therefore you earn 1/54 of the post-lease salary as pension. You continue to contribute at the pre-lease rate (find the NHS tiered pension contributions online). So if your salary is £30,000, your post-lease pensionable pay is £24000 of which 1/54th is £444.44 pension per annum after the state pensionable age. (vs £555 if you hadn't got the lease)
Another big problem is coming out of the lease as it is then counted as growth in your pensionable earnings which will revalue all the contributions made in any final salary scheme (the 2008 one) and present you with a very sizeable annual allowance charge.
Heres the BMA guidance: https://www.bma.org.uk/media/3834/bma-car-leasing-...
other links:
https://twitter.com/goldstonetony/status/134532069...
Don't forget the p11D value either
Thank you for the in-depth response. I won’t pretend to understand all of what you’ve said and I clearly need a bit more research.
From our point of view, something like an ID3 is £309 per month. Our current car running costs minus fuel is £75 per month. Fuel is £1800, elec would be around £200 so around £133 per month. We’d potentially be in a lease for only £100 per month due to being fully maintained and electric. Which is nuts.
Can you overpay to cover the pension reduction?
If we're below the Annual Allowance for all 3 of the years I presume there wouldn't be an issue in terms of potential penalty?
I understand the reduction via 1/54th however how does that affect us in the future if we lease for 3 years now but potentially still have 15 years of service left before retirement? Saying 12 of them were without salary sacrifice?
From our point of view, something like an ID3 is £309 per month. Our current car running costs minus fuel is £75 per month. Fuel is £1800, elec would be around £200 so around £133 per month. We’d potentially be in a lease for only £100 per month due to being fully maintained and electric. Which is nuts.
Can you overpay to cover the pension reduction?
If we're below the Annual Allowance for all 3 of the years I presume there wouldn't be an issue in terms of potential penalty?
I understand the reduction via 1/54th however how does that affect us in the future if we lease for 3 years now but potentially still have 15 years of service left before retirement? Saying 12 of them were without salary sacrifice?
Edited by Nigel-maxgs on Thursday 26th October 15:08
Edited by Nigel-maxgs on Thursday 26th October 15:15
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