Pension considerations for IMGs

International medical graduates working for the NHS are able to join the NHS pension scheme; however, the decision about when, and if, to join should be considered alongside how this fits within your wider plans. Chase de Vere Medical, the specialist financial advisors for medical professionals, explain which pension opportunities are available to you. 

Our NHS has a diverse range of medical staff from both the UK and abroad. International medical graduates have to sit additional testing before their GMC licences are granted and they are permitted to work in the UK. Once in post international medical graduates are entitled to the same staff benefits as other NHS staff, including access to the NHS pension scheme.

It is vital that international medical graduates understand these benefits and how they fit within their wider financial planning. The NHS Pension Scheme remains one of the best workplace schemes in existence, offering a guaranteed level of pension when members retire.

Although there is a strong case for joining the pension scheme as soon as you enter the NHS, there are many reasons why somebody might not sign up until later in life particularly if you join the NHS from overseas, either qualifying in medical school and working in their country of birth first or coming to the UK to carry out their training.

As the original intention might only to be in the country temporarily, the benefits of joining the NHS Pension scheme might not be immediately apparent.

Often, for a variety of reasons, such as meeting a partner or being offered a substantive post, the decision is then made to stay in the UK and the advantages of that potential scheme membership are missed out on.

NHS Pension Scheme overseas members

If you are an overseas medical professional currently training or working in the NHS, there are options available to avoid missing out on the Pension Scheme benefits.

• If you join the NHS Pension Scheme and leave within two years of service, you will get a refund of the contributions you have made. That said, expect your refund to be less than what you paid in. One reason for this is the deduction of any income tax relief you benefited from when you made your payments: 20% on the first £20,000 and 50% on any excess, so not necessarily a direct match for the tax relief given.
• If you stay for more than two years and then decide to return overseas, your benefits will become deferred and increase with inflation. These can then be paid in your country of residence when you choose to retire.
  

Making up a pension shortfall

If you join the NHS Pension Scheme later in life and have a shortfall, there are several opportunities available to you.

If you joined the NHS before 31 March 2008, you could have purchased added years although this benefit is no longer available to buy.

Another option is an additional pension purchase. How much you can buy will depend on which scheme you’re a member of:

• If you’re part of the 1995 Section or 2008 Section of the NHS Pension Scheme, you can buy up to £5,000 of guaranteed index linked pension per annum. This is known as Additional Pension Purchase and can be bought as a single contribution lump sum or paid for over a maximum of 20 years.
• If you’re in the NHS Pension 2015 Scheme, the rules are the same, but you can buy up to £6,500 per annum, in multiples of £250.

Whichever scheme you are in, you can choose to build in survivor dependents’ benefits, for an additional cost. These will then be paid out to an eligible spouse, partner or child in the event of your death.

Alternatives to NHS options

In pension planning there are alternatives to those additional options available as part of the NHS Scheme, such as money purchase arrangements. This is where a pension pot is built up through contributions and investment returns.

However, anyone making additional pension contributions of any kind needs to be mindful of certain factors, including your annual allowance.

Everyone’s circumstances are different depending on when you join, when you want to retire and whether you have other pension arrangements in place.

Planning for the future

Whatever your ambitions are for the future, a fulfilling and secure retirement takes careful planning.

You may be new to the NHS and thinking long-term or approaching the end of your dedicated career; either way it is important that you are financially prepared for when the day arrives.

It is never too late, or early, to start retirement planning. For help in ensuring you have an effective pension strategy, tailored to your individual circumstances, log onto our website chasedeveremedical.co.uk or click here to book an appointment with an adviser.

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