Q. I’m aware that I’m not going to accrue the full 40 years in the NHS Pension Superannuation Scheme as I did not qualify until I was aged 25. I’ve heard about buying ‘added years’. Can you tell me how to go about this?
A. Until April 2008, buying added years was available.
Many people continue to refer to it, but it’s now known as ‘buying additional pension’.
Here’s an excerpt from the NHS site:
AP is a flexible way of increasing your Scheme pension. It allows you to choose to buy extra annual pension, in today’s terms, and see clearly how much the purchase will cost. Under this option you elect to buy a set amount of annual pension for an agreed amount of contributions that you can choose to pay either as a lump sum or as a regular payment for an agreed period of time.
The minimum amount of AP you can buy is £250 and the maximum amount is £5,000*. AP is revalued in line with inflation both before and after retirement.
You can choose whether your AP is just for you or also provides benefits for your dependants in the event of your death.
* This is the current limit in place and may increase in future years.
Of course, it’s sensible to think about a few things before you sign on the dotted line:
- will you actually require more pension income in retirement? (you may already have sufficient projected income)
- what other investment options are available? (this includes the AVC account offered through the NHS, plus personal pensions, SIPPs and non-pension type investments)
I recommend you visit the NHS website
And the NHS AP calculator