As a chartered financial adviser, how many conversations have you had about AA and LTA this year?
How many of those are from members of the biggest pension scheme in the UK?
A pension scheme with over 1.5 million employed active members? The fifth biggest employer in the world.
With a large number of high-earners subject to income tax, personal allowance, pension annual allowance and lifetime allowance restrictions? My guestimate is over 200,000 earning more than £100kpa, all in the same scheme.
All of them working and living near you.
Who, because of the generous pension accruals offered by the biggest pension scheme in the UK, and whom are affected by AA and LTA reductions, don’t know what entitlement they will get from the pension scheme at retirement, until they retire?
Now, that might seem confusing enough but I’ll come back to that later.
I remember presenting on a joint pension platform with the NHS at the Orthopaedic surgeon’s conference in 2010 and explaining to doctors, surgeons and consultants that they would need to get their wallets out: the government was coming after them.
The NHS pension they were accruing was too generous.
They were accruing over the limits being set by the Treasury (post 2008 financial crisis) and for the first time ever since the NHS began, their unrestricted pension benefits would be capped and they’d have to pay. They’d have to get their wallets out (and you can imagine how well that presentation went….).
That is now coming home to roost – Big time.
I’ve had 5 NHS referrals already this year (you’ll understand why in a minute…) and here’s the typical example:
*total earnings £200k
*Pension accrued @80-100kpa
*Subject to tapered AA
*maybe has LTA protection, maybe not
*member of 1995 section and or 2008 section and or 2015 section – pick any combination
*3n/80ths LS TFc in there somewhere
*LTA excess tax charge to pay
And here is the thing: the NHS will NOT tell them or calculate what their final benefit options look like.
Yes, I’ll repeat that:
The NHS will NOT tell them or calculate what their final benefit options look like…until after they retire.
Their accountant has no idea. The accountant can’t advise on the pension nor understand the interaction between tapered annual allowance, scheme pays options and LTA excess tax charge. Not a clue.
But this is where we come in : this is our job.
The NHS pension scheme administration and support is non-existent for these high-earners.
They need help to understand what lump sum options are available for them and what their final pension income looks like: NOT 40 days AFTER they officially retire (which is the current state of play).
This market needs chartered financial planners who can do these calculations: this market needs YOU.
We have just released our NHS masterclass where we walk you through the technical aspects of Annual Allowance and Lifetime Allowance with a series of video tutorials and a PDF download. Then, to put it into practice and transfer knowledge to business we go through a ‘real’ NHS case study scenario in full showing you how to apply the calculations etc.
I know that by developing your competence in this area, it will increase your confidence and you will be referred for more work.
I know because that is what happens to me.
As a chartered financial planner you are in the knowledge business. This is business that only you can do.
This ONE masterclass is worth it’s weight in gold but you will have access to the WHOLE series of our masterclasses – all designed to lead you through the problem-solving process as well as simplifying the solutions based on real problems that are important, critical, and usually complex.
Our series of masterclasses of advice in action are designed to continue to support your career as a chartered financial planner and help you to put your advice into action: https://expertpensions.co.uk/services/