Transfer your NHS pension into a QROPS before it's too late!

NHS Pension Transfers to be banned from April 2015

Please note that as of 5 April 2015 transfers out of the NHS pension scheme are no longer permitted, and the content on this page is no longer current. If your transfer paperwork was submitted before this date, the transfer will still proceed. For more information, please contact us.

NHS Pension Transfers will be banned from April 2015!

It is now official – from April 2015, it will be prohibited to transfer your UK pension to a QROPS scheme.

The UK government originally announced the news in the Budget in March 2014, and has since undertaken a 2 month consultation period to gain the views of the pensions industry and UK business organisations.

On Monday 21 July, it formally made its announcement – that transfers from unfunded public service defined benefit schemes (such as the NHS scheme) will be banned from 5 April 2015.  You can read the original statement on the UK Parliament’s website, here – (please refer to page 2, paragraph 3).

The reason for the ban on transfers of unfunded public sector pensions is that Treasury is worried that if too many people choose to transfer their pension into a defined contribution scheme (such as a SIPP or a QROPS), then this will place a huge burden on public sector finances.

Can I transfer my NHS pension to a QROPS scheme now?

Yes, the good news for NHS pension scheme members, including those resident in India, is that it is still possible to transfer your NHS pension into a QROPS scheme in India.

Transfers out of the NHS pension scheme are still being permitted, as the UK government need to introduce legislation through parliament in order for these changes to become law.  Therefore, any transfer presented to the NHS scheme will still be honoured, provided the transfer is completed before 5 April 2015.

How long do I have to transfer my NHS pension to a QROPS?

After 5 April, the NHS pension scheme will be prohibited to authorise the transfer of any pension funds out of the NHS scheme into a QROPS (or any other pension scheme).  Currently, the NHS scheme is taking around 3 months to process the transfer discharge papers and release the pension funds to the QROPS trustee.

In addition, the scheme member must obtain an up to date Cash Equivalent Transfer Value (“CETV”) from the NHS before submitting the transfer request.  As a result of a huge increase in requests for transfers out, it is currently taking around 3 months for the NHS scheme administrators to process these valuation requests.

Therefore, for a member who wishes to transfer out of the NHS scheme, the transfer request forms must be with the NHS 6 months before 5 April – ie 5 October 2014.

If I don’t transfer out – what I am I missing out on?

We have covered the benefits of QROPS schemes in detail here. But in short, by keeping your NHS pension, and not transferring into a QROPS scheme, you will be missing out on a variety of potential benefits:

  • Pass on your pension fund to your family after you die. With the NHS pension scheme, after you die, your spouse (if he or she is still alive) receives half of your pension, and when the spouse dies, there is nothing left to pass on to your loved ones. With a QROPS pension, the entire remaining pension pot is available to be distributed to your beneficiaries – completely free of any inheritance tax.
  • Retire at age 50. Under some QROPS schemes, you can take your tax free lump sum and start to daw ann income at age 50 – as opposed to 60 under the NHS pension scheme.
  • Larger tax free lump sum.  With a QROPS scheme, you can take up to a 30% tax free lump sum, as opposed to just 25% under the NHS pension scheme.
  • Increased investment flexibility – you have complete control over your pension fund, and can invest in any types of investment you choose, including Indian companies and investments.

How can we help?

QROPS Adviser Group has extensive experience of transferring pensions out of the NHS pension scheme and into QROPS schemes, for both residents of India and other countries.

We can help ensure that your NHS pension is transferred across to a suitable QROPS scheme in good time before the April 5 deadline expires.

For more information about transferring your NHS pension before the deadline, please contact us immediately.