Currently pay into the NHS Pension scheme but would like to retire at 55 (currently 35)

11 January 2023

Got a question?We'll put your question to our panel of helpful advisers

Question by Matt

Currently pay into the NHS Pension scheme but would like to retire at 55 (currently 35) - cannot access the NHS pension (without reduction) until 68/70. How would I best be able to fund this? Via a SIPP/LISA etc. Thanks.

Answered by Chris Broome

Dear Matt,

That's a great question to ask.

In short, yes, you would need to utilise other tax wrappers to create a number of additional savings pots from which to spend from age 55 to 68/70 (as you detail).

A Lifetime ISA (LISA). You can put in up to £4,000 each year, until you're 50. You must make your first payment into your ISA before you're 40. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. The Lifetime ISA limit of £4,000 counts towards your annual ISA limit. This is £20,000 for the 2022 to 2023 tax year.

A Stocks and Share ISA. You can pay a total of £20,000 a year into a S&S ISAs each tax year. If you contribute £4,000 into a LISA also, you'll be capped at a further £16,000 into your S&S ISA.

A Personal Pension Plan, though you'd need to be careful to not breach your annual allowance each year, which may be tapered (reduced) if your total annual earnings are over a certain limit.

And, if you've maximised each of the tax wrappers allowances, you could direct surplus income into a General Investment Account (GIA). A GIA does not have the same favourable tax treatment as a pension or ISA, but it does provide a useful environment to deploy/invest excess cash (versus leaving it in a bank or short-term fixed rate account).

I would always recommend you seek out regulated independent advice before proceeding with any of the above, especially regarding the NHS /new pension point.

I hope this answer helps. If you need anything else just let me know.

Kind regards

Chris Broome

Answered by

Chris Broome

Chartered Financial Planner

My name is Chris Broome and I own a wonderful fixed-fee and independent financial planning practice called Longhurst.